/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/130611.mbx C L A S S A C T I O N R E P O R T E R Tuesday, June 11, 2013, Vol. 15, No. 114 Headlines AETNA LIFE: Accused of Misinterpreting Medical Benefit Plans ALON HOLDINGS: Continues to Defend Overcharging Suit vs. Unit ALON HOLDINGS: Continues to Defend Suit Over Dairy Products Sale ALON HOLDINGS: Continues to Defend Suit Over Diesel Discount ALON HOLDINGS: Continues to Defend Suit Over Hebrew Markings ALON HOLDINGS: Continues to Defend Suit Over Petrol Discounts ALON HOLDINGS: Deal in Suit Over Allowed Maximum Prices Approved ALON HOLDINGS: Defends Class Suit Over Misleading Special Sales ALON HOLDINGS: Defends Suit Over Breach of Regulation Order ALON HOLDINGS: Defends Suit Saying Unit Misleads YOU Card Holders ALON HOLDINGS: Disabled Parking Law Violation Suit Withdrawn ALON HOLDINGS: Dor Alon Defends Suit Over "Spidomat" Arrangement ALON HOLDINGS: Dor Alon Still Defends LPG-Related Class Suit ALON HOLDINGS: Gasoline 95 Octane-Related Suit Remains Pending ALON HOLDINGS: In Mediation to Settle Suit Over Purchase Vouchers ALON HOLDINGS: Mega and You Face Suit Related to "CalChoice" ALON HOLDINGS: Mega Faces Suit Over Delicatessen Product Marking ALON HOLDINGS: Mega Sued Over Misleading Product Descriptions ALON HOLDINGS: Phone Services Suit Settlement Approved in Jan. ALON HOLDINGS: Plaintiff Appeals Fueling-Related Suit Dismissal ALON HOLDINGS: Ready-Made Cakes & Cookies-Related Suit Withdrawn ALON HOLDINGS: Reviews Suit vs. Mega Over Excessive Charges ALON HOLDINGS: Settlement of Consumer Law Violation Suit Approved ALON HOLDINGS: Settlement of Suit Over "Economy Packs" Approved ALON HOLDINGS: Settlement of Suit Over Unconsumed Gas Approved ALON HOLDINGS: Settlement of Suit Over White Cheese Packages OK'd ALON HOLDINGS: Still Defends Suit Over Weight of Product Packages ALON HOLDINGS: Suit Over 1994 Cartel vs. Unit Remains Pending ALON HOLDINGS: Suit Over Alonit Stores' Product Labels Withdrawn ALON HOLDINGS: Suit Over Font Size of Written Ads Dismissed ALON HOLDINGS: Suit Over Food Products With Fluids Withdrawn ALON HOLDINGS: Suit Over Ingredient Markings Withdrawn in March ALON HOLDINGS: Suit Over Sales at Kfar Hasha'ashuim Withdrawn ALON HOLDINGS: Suit Over Sugared Fruit Products Withdrawn in Dec. ALON HOLDINGS: Tenant Suit vs. Dor Alon Dismissed in February ALON HOLDINGS: Unit Accused of Violating Sanitarian Standards ALON HOLDINGS: Unit Defends Suit Alleging Breach of Regulations ALON HOLDINGS: Unit Defends Suit by Series A Debenture Holders ALON HOLDINGS: Units Face Suit Over Baby Mattress Certification ALON HOLDINGS: Vending Machines Suit vs. Units Withdrawn in Feb. ALON HOLDINGS: Withdrawal of "Ski" Soft White Cheese Suit Okayed ALON HOLDINGS: Withdrawal of Choking Hazard Warnings Suit OK'd ALON HOLDINGS: Withdrawal of Egg-Noodle Products Suit Approved ALON HOLDINGS: Withdrawal of Petrol Temperature Suit Granted ALON HOLDINGS: Withdrawal of Price Per Unit Marking Suit OK'd ALON HOLDINGS: Withdrawal of Water Contamination Suit Approved AMERICAN INTERNATIONAL: In Debate Over Viability of Claims AMYRIS: Securities Class Action Over Biofene Production Baseless AU OPTRONICS: Supreme Court Grants Review of Mississippi vs. Au CHULA VISTA, CA: Settles Utility Tax Class Action for $8 Million CVS CAREMARK: Investors Obtain Favorable Ruling in Class Action DE BEERS: Consumers Set to Get Class Action Settlement Checks EL AL ISRAEL: Passengers File Class Action Over Cancelled Flight ELECTRONIC ARTS: 3rd Cir. Returns Likeness Case to N.J. Court FANNIE MAE: Genesee County Will Go on With Class Action Lawsuit FRONTPOINT: Faces Suit Over Alleged Libor Manipulation GREENBERG TRAURIG: Former Shareholder Withdraws Class Action IDEATIONS DIVEALERT: Recalls 2,500 Scuba Dive Signaling Devices IKEA CANADA: Recalls 6,000 LYDA Jumbo Cups Due to Burn Hazard INDIANA: BMV Admits it May Have Overcharged Driver's Licenses JAMAICA PUBLIC: Dec. 9 Hearing Set for Class Action Appeal KLEYNIMALS LLC: Recalls Stainless Steel Key Toys for Babies KOHL'S DEP'T STORES: Appeals Court Revives False Ad Class Action MAGNUM HUNTER: Finkelstein & Krinsk Files Securities Class Action MERCK: Judge Allows Propecia Class Action in Canada to Proceed NORTH SHORE AGENCY: Faces Debt Collection Class Action in Florida ORCHARD ENTERPRISES: Loses Bid to Nix Digital Music Class Action PACIFIC FINANCIAL: Faces Class Action Over Broker Trust Breach RADIENT PHARMACEUTICALS: Jury Trial in Securities Suit in November SCHNUCK MARKETS: Data Breach Class Action Removed to Federal Court SINO-FOREST CORP: Lerners Discusses Shareholder Litigation ST. CROIX: Ruling May Have Impact on Environmental Mass Actions STANDARD FIRE: Mitchell Silberberg Discusses Supreme Court Ruling US NURSING: Littler Mendelson Discusses Class Action Settlement VENTRUS BIOSCIENCES: Class Action Lead Plaintiff Deadline Nears VISA INC: NRF Opts Out of Swipe Class Action Settlement WAL-MART STORES: Several Retailers Opt Out of Card Fee Settlement YELP: Small Claims Court Ruling in Advertising Suit Appealed * Product Liability Class Action Resurgence Expected in Australia * IDTIS Issues Alert on Medical Class Action Scam ********* AETNA LIFE: Accused of Misinterpreting Medical Benefit Plans ------------------------------------------------------------ Elizabeth L., James L., and Olivia L., individually and as representatives of the class of similarly situated individuals; and L.M. and N.M., as guardians of M.M., and as representatives of the class of similarly situated individuals v. Aetna Life Insurance Company, Case No. 3:13-cv-02554 (N.D. Cal., June 6, 2013) is brought on behalf of a proposed class composed of individuals covered by Aetna insurance policies or Aetna administered health benefit plans, who have been wrongfully denied authorization and payment for mental health services at residential treatment facilities. Aetna has systematically misinterpreted and misapplied the language of the medical benefit plans it insures and administers in a way that has resulted in wrongful denial of claims for residential treatment facilities that are licensed to provide inpatient care in the state in which the residential treatment facility does business, the Plaintiffs allege. They contend that as a result of its misinterpretation and misapplication of its insurance policies or medical benefit plan language, Aetna routinely denies authorization and coverage of mental health care provided at residential treatment facilities that it should authorize and cover under the plain language of the plan. Elizabeth, James and Olivia are residents of Los Angeles County, California. They were covered by a health benefits plan provided through James' employer, which plan was insured or administered by Aetna. L.M. and N.M. are residents of Santa Clara County, California. They are the parents and guardians of M.M., a minor child. L.M., N.M. and M.M. were covered by a health benefits plan provided through N.M.'s employer, which plan was insured or administered by Aetna. Aetna is a corporation with its principal place of business in Connecticut. Aetna provides insurance and third party administrative service to a variety of individuals and businesses across the United States and does business in all 50 states. The Plaintiffs are represented by: David M. Lilienstein, Esq. DL LAW GROUP 345 Franklin St. San Francisco, CA 94102 Telephone: (415) 392-2289 Facsimile: (415) 358-8484 E-mail: david@dllawgroup.com - and - Brian S. King, Esq. BRIAN S. KING, ATTORNEY AT LAW 336 South 300 East, Suite 200 Salt Lake City, UT 84111 Telephone: (801) 532-1739 Facsimile: (801) 532-1936 E-mail: brian@briansking.com - and - Colin P. King, Esq. Jessica A. Andrew, Esq. DEWSNUP KING & OLSEN 36 S. State Street, Suite 2400 Salt Lake City, UT 84111 Telephone: (801) 533-0400 Facsimile: (801) 363-4218 E-mail: cking@dkolaw.com jandrew@dkolaw.com ALON HOLDINGS: Continues to Defend Overcharging Suit vs. Unit ------------------------------------------------------------- Alon Holdings Blue Square - Israel Ltd. continues to defend a subsidiary against a purported class action lawsuit alleging fuel overcharging, according to the Company's April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. In October 2009, Dor Alon Energy In Israel (1988) Ltd. received a statement of claim and an application for approval of the claim as a class action; the claim was lodged against Dor Alon and other fuel companies. The claimant claims payment of damages of NIS124 million (Dor Alon's share in the said claim amount as per the statement of claim is NIS21.9 million). According to the claimant, the defendants overcharged him for fuel when filling up his car. According to the claimant, after passing his debit card but before starting to fill up, the payment meter started operating without the provision of fuel. The overcharge has allegedly amounted at times to several Agorot and at times to several NIS. The parties have reached a compromise that was rejected by court, and the court asked the parties to file their pleadings before the compromise agreement is filed. In the Company's opinion, based on the opinion of its legal advisers, the chances that the claim will be rejected exceed 50%. Accordingly, the Company did not make any provision for this claim in its financial statements. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Continues to Defend Suit Over Dairy Products Sale ---------------------------------------------------------------- In December 2010, a claim and a request to recognize it as a class action was filed against Alon Holdings Blue Square - Israel Ltd. and its wholly-owned subsidiary, the Company and Mega Retail Ltd. ("Mega"), relating to the sale of different cheese and butter products in the supermarkets operated by Mega. According to the claimant, the Company sells surrogate cheese and butter products as if they were real cheese and milk products, and in that way misleads the customers. The claimant quantifies his damage at approximately NIS700 and estimates the damage to the group of claimants for the purpose of the claim at NIS456 million. No further updates were reported in the Company's April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. In the opinion of the Company, based on the opinion of its legal advisers, the chances that the claim will be rejected exceed 50%. Accordingly, the Company did not make any provision for this claim in its financial statements. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Continues to Defend Suit Over Diesel Discount ------------------------------------------------------------ In November 2010, a claim and a request to recognize it as a class action was filed against Alon Holdings Blue Square - Israel Ltd.'s "YOU" loyalty plan, claiming that discounts for filling the car with diesel at Dor Alon Energy In Israel (1988) Ltd. petrol stations, which the club supposedly promised as well as wrongly advertised were not given in reality. If the claim were to be accepted as a class action, the claimant assesses his claim at NIS54 million. In the opinion of the Company, based on the opinion of its legal advisers, the chances that the claim will be rejected exceed 50%. Accordingly, the Company did not make any provision for this claim in its financial statements. No further updates were reported in the Company's April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Continues to Defend Suit Over Hebrew Markings ------------------------------------------------------------ Alon Holdings Blue Square - Israel Ltd., continues to defend itself against a purported class action lawsuit over Hebrew marking in products sold by its "Kfar Hashashuim" chain of stores, according to the Company's April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. In January 2012, a letter of claim and a motion for approval of action as a class action was filed against the Company regarding the sale of toy and other products by its "Kfar Hashashuim" chain of stores. The Claim alleges that the Company fails to mark in Hebrew required details such as identifying details of the importer of the products, the manufacturer, supplier, country of manufacturing, as well as the range of ages the product is designated for, and certain warnings required by law. If the Claim is approved as a class action, the approximate claim is estimated by the plaintiff at approximately NIS18 million. The plaintiff further requested the court to issue a decree ordering the Company to fulfill the requirements of the law and mark its products accordingly. In the opinion of the Company, based on the opinion of its legal advisers, the chances that the claim will be rejected exceed 50%. Accordingly, the Company has not made any provision for this claim in its financial statements. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Continues to Defend Suit Over Petrol Discounts ------------------------------------------------------------- In December 2010, a claim and a request to recognize it as a class action was filed against Alon Holdings Blue Square - Israel Ltd.'s "YOU" loyalty plan customer club, claiming that discounts for filling the car with petrol at Dor Alon Energy In Israel (1988) Ltd. petrol stations, which the club supposedly promised were not given. If the claim were to be accepted as a class action, the claimant assesses his claim at NIS894 million. In the opinion of the Company, based on the opinion of its legal advisers, the chances that the claim will be rejected exceed 50%. Accordingly, the Company did not make any provision for this claim in its financial statements. No further updates were reported in the Company's April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Deal in Suit Over Allowed Maximum Prices Approved ---------------------------------------------------------------- The settlement of a class action lawsuit involving Alon Holdings Blue Square - Israel Ltd.'s subsidiary alleging it sold products at prices higher than the maximum prices allowed was approved in December 2012, according to the Company's April 29, 2013, Form 20- F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. In September 2011, a lawsuit was filed against the Company's wholly-owned subsidiary, Mega Retail Ltd., along with a request to be approved as a class action in regard to the sale of products which, as argued by the claimant, are subject to the Product and Service Price Regulation Order (Maximum Prices for Milk and Milk Products) (the "Order"). The lawsuit claims that since the products carry special kosher certifications they are offered at prices higher than the maximum prices allowed according to the Order. The claim was also filed against Tnuva Corporation, the Company's main supplier of dairy, fresh produce and poultry products, and two competing supermarket chains. The damages sought from Mega Retail are NIS6 million. In December 2012, a settlement between the parties was approved by the court. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Defends Class Suit Over Misleading Special Sales --------------------------------------------------------------- Alon Holdings Blue Square - Israel Ltd. is defending itself against a purported class action lawsuit alleging it misleads its customers with respect to special sales for food products that are sliced or cut, according to the Company's April 29, 2013, Form 20- F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. In March 2012, a letter of claim and a motion for approval of action as a class action was filed against the Company, alleging that it misleads its customers in special sales it holds regarding food products that are sliced or cut to the customers' request, and are priced per weight. The plaintiff claims that the Company does not provide full and correct details regarding the terms of the special sales, violating requirements of the law in connection with products marking and price display. The plaintiff claims, among other, that customers choosing to buy such products under special sales with accordance to the Company's advertisements are required to purchase not willingly an extra weight of the product, for the full price. If the Claim is approved as a class action, the approximate claim is estimated by the plaintiff at approximately NIS72 million. The plaintiff further requests the court to issue a decree ordering the Company to fulfill the requirements of the law. In the opinion of the Company, based on the opinion of its legal advisers, the chances that the claim will be rejected exceed 50%. Accordingly, the Company did not make any provision for this claim in its financial statements. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Defends Suit Over Breach of Regulation Order ----------------------------------------------------------- Alon Holdings Blue Square - Israel Ltd. is defending a subsidiary against a purported class action lawsuit alleging breach of the product and service regulation order, according to the Company's April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. On September 13, 2012, a letter of claim and motion for approval as a class action was filed against a subsidiary of Dor Alon Energy In Israel (1988) Ltd. and other defendants, for an aggregate amount of NIS77 million. The letter of claim states that the defendants have breached the provisions of the product and service regulation order (maximum prices in filling stations - 2002 (herein, "the Order") as regards conditions for collection of extra charge on full service, nighttime service and rest days service, as well as the provisions of article 3(D) of the of the product and service regulation order (maximum prices in filling stations) (amendment) - 2006 (herein, "the Amended Order") as regards the signage of self-service fuelling pumps. The claimants argue that the order has set criteria for a minimum rate of self- service pumps in the filling stations out of the total number of pumps in the filling station, and that whenever the criterion is not met, it is prohibited to collect service fee in that station. The claimants further allege that according to the Amended order, whenever a pump is not marked in accordance with the Order, it cannot be regarded as a self-service pump. As a result, the Defendants did not meet the criterion stipulated in the Order in certain stations and are therefore prohibited from collecting service fee in those filling stations. In the opinion of the Company, based on the opinion of its legal advisers, the chances that the claim will be rejected exceed 50%. Accordingly, the Company did not make any provision for this claim in its financial statements. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Defends Suit Saying Unit Misleads YOU Card Holders ----------------------------------------------------------------- Alon Holdings Blue Square - Israel Ltd., continues to defend a subsidiary against a purported class action lawsuit alleging it misleads its "YOU" loyalty plan card holders, according to the Company's April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. In November 2011, a letter of claim and a motion for approval of action as a class action was filed against the Company's wholly- owned subsidiary, Mega Retail Ltd., alleging that Mega Retail is misleading its "YOU" card holder customers, by charging prices higher than advertised for products offered within its customers' loyalty plan. If the claim is approved as a class action, the approximate claim is estimated by the plaintiff at approximately NIS10 million. In the opinion of the Company, should it be obligated to pay any amount with regard to this matter, it is not expected to be a material sum. In the opinion of the Company and its advisors, the provisions included in the Company's financial statements are sufficient to cover the potential liabilities. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Disabled Parking Law Violation Suit Withdrawn ------------------------------------------------------------ Plaintiff's request to withdraw a purported class action lawsuit alleging violations of the Parking for Disabled People Law was accepted in November 2012, according to Alon Holdings Blue Square - Israel Ltd.'s April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. On April 15, 2012, Dor Alon Energy In Israel (1988) Ltd. received a letter of claim and a motion for approval of action as class action against a subsidiary of Dor Alon and third parties for a total amount of approximately NIS4.4 million. The letter of claim argued that the defendants violated the provisions of the Parking for Disabled People Law, 1993-5753 and the Equality for People with Disabilities Law, 1998-5758, by not providing free parking to disabled people in the parking lot of "City Windows" in Haifa. The plaintiff argued that pursuant to the Law, the defendants are obligated to provide free parking in public parking lots and in public places that the only access to them is through parking in such public places. In November 2012, the court accepted the plaintiff's request to withdraw the claim. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Dor Alon Defends Suit Over "Spidomat" Arrangement ---------------------------------------------------------------- Alon Holdings Blue Square - Israel Ltd.'s subsidiary is defending a purported class action lawsuit arising from its "Spidomat" arrangement, according to the Company's April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. On September 6, 2012, a letter of claim and motion for approval as a class action was filed against Dor Alon Energy In Israel (1988) Ltd. for an aggregate amount of NIS43.2 million. The plaintiff claims that as a customer of the Dor Alon "Spidomat" arrangement for car fueling at reduced prices, she discovered that her reduction was less than the regular discount given to all other customers at the station. As result, the Plaintiff claims she suffered financial damages from being a member of the "Spidomat" arrangement. In the opinion of the Company, based on the opinion of its legal advisers, the chances that the claim will be rejected exceed 50%. Accordingly, the Company did not make any provision for this claim in its financial statements Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Dor Alon Still Defends LPG-Related Class Suit ------------------------------------------------------------ A subsidiary of Alon Holdings Blue Square - Israel Ltd. continues to defend a purported class action lawsuit over temperature of liquefied petroleum gas, according to the Company's April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. In February 2011, a claim and an application for approval of the claim as a class action was filed against Dor Alon Energy In Israel (1988) Ltd., and other fuel companies. The issue in the claim is differences between the temperature of the LPG and the energy it provides as a result of burning. In the opinion of the Company, based on the opinion of its legal advisers, the chances that the claim will be rejected exceed 50%. Accordingly, the Company did not make any provision for this claim in its financial statements. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Gasoline 95 Octane-Related Suit Remains Pending -------------------------------------------------------------- A purported class action lawsuit over the calculation of the maximum price of gasoline 95 octane remains pending, according to Alon Holdings Blue Square - Israel Ltd.'s April 29, 2013, Form 20- F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. On August 22, 2011, Dor Alon Energy In Israel (1988) Ltd. received a letter of claim and a motion for approval of action as class action against Dor Alon and the three other gasoline companies for a total of NIS1 billion (of which Dor Alon's share is NIS167 million). The claimants argue that the gasoline companies inflated the "marketing expense item" which is incorporated into the calculation of the maximum price of gasoline 95 octane by adding expenses unrelated to the sale of gasoline, thus, misleading the regulator and enabling themselves to sell gasoline 95 octane at a higher price than the price that should be charged. The claimants assert that this is violation of legislated provisions in the Supervision Order on Goods and Services (Maximum Prices in Gasoline Stations) - 2002; the Consumer Protection Law - 1981; and the Damage Ordinance (new version) - 1968. In the opinion of the Company, based on the opinion of its legal advisers, the chances that the claim will be rejected exceed 50%. Accordingly, the Company did not make any provision for this claim in its financial statements. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: In Mediation to Settle Suit Over Purchase Vouchers ----------------------------------------------------------------- Alon Holdings Blue Square - Israel Ltd. disclosed in its April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012, that it entered into a mediation process to settle a class action lawsuit over the issuance and sale of purchase vouchers. In September 2011, a lawsuit was filed against the Company's wholly-owned subsidiary, Mega Retail Ltd., and Shufersal Ltd., a competitor, along with a request to be approved as a class action in relation to the issuance and sale of purchase vouchers. The action consists of two claims: (1) The designation of an expiration date to the vouchers constitutes a "depriving condition" in a standard contract and is therefore invalid; and (2) The voucher provision that a consumer who uses vouchers to pay for his purchase can be given change only in vouchers redeemable in the same store constitutes a "depriving condition" and is therefore invalid. The claimant asked for declaratory relief that these provisions are invalid, as well as for damages calculated by the court, taking into account all holders of vouchers and/or shoppers who have used the vouchers over the past seven years. Mega, Shefersal and the plaintiff have agreed to enter into a mediation process, which as of April 29, 2013, is still pending. In the opinion of the Company, based on the opinion of its legal advisers, the possibility that the claim will be rejected exceeds 50%. However, the Company has agreed to enter into a mediation process, which as of April 29, 2013, is still pending. If the mediation will be successful, the impact on the Company's profit or loss will be immaterial. In the opinion of the Company and its advisors, the Company has made sufficient provisions in its financial statements for this mediation. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Mega and You Face Suit Related to "CalChoice" ------------------------------------------------------------ Alon Holdings Blue Square - Israel Ltd.'s subsidiary and its customer club are facing a class action lawsuit relating to the You credit card "CalChoice," according to the Company's April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. On November 1, 2012, a letter of claim and motion for approval as a class action was filed against the Company's wholly-owned subsidiary, Mega Retail Ltd., the You Customer Club, Diners Club Israel Ltd., and Credit Cards for Israel Ltd., for an aggregate amount of approximately NIS120 million. The Plaintiff claims that the defendants mislead the holders of a certain You credit card named "CalChoice." The You credit card "CalChoice" enables its holders to obtain extra credit by way of charging a minimum of NIS200 for every NIS5,000 spent. The remaining balance is postponed and is charged in the next month, while the holder of the card can provide each month the amount he would like to pay out of such balance. The Plaintiff alleges that the defendants do not properly notify the client of the interest rate to be charged, and that such interest rate is significantly higher than interest rates charged at bank accounts or other competing credit cards. The plaintiff further claims that the defendants did not properly notify the card holder of his option to determine the amount to be charged each month, whilst automatically charging the minimum required. In the opinion of the Company, based on the opinion of its legal advisers, the chances that the claim will be rejected exceed 50%. Accordingly, the Company did not make any provision for this claim in its financial statements. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Mega Faces Suit Over Delicatessen Product Marking ---------------------------------------------------------------- Alon Holdings Blue Square - Israel Ltd.' subsidiary is facing a purported class action lawsuit alleging it failed to properly mark certain delicatessen and bakery products, according to the Company's April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. On July 26, 2012, a letter of claim and motion for approval as a class action was filed against the Company's wholly-owned subsidiary, Mega Retail Ltd., for an aggregate amount of approximately NIS18 million. The Plaintiff claims that Mega failed to properly mark certain delicatessen and bakery products, which are baked and packed prior to sale within Mega's supermarket stores, with information regarding their ingredients, nutrition facts, expiry date, etc. In the opinion of the Company, based on the opinion of its legal advisers, the possibility that the claim will be rejected exceeds 50%. Accordingly, the Company did not make any provision for this claim in its financial statements. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Mega Sued Over Misleading Product Descriptions ------------------------------------------------------------- Alon Holdings Blue Square - Israel Ltd.'s wholly-owned subsidiary is facing a purported class action lawsuit alleging certain of its product descriptions are misleading, according to the Company's April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. In January 2013, a letter of claim and motion for approval as a class action was filed against the Company's wholly-owned subsidiary, Mega Retail Ltd., for an aggregate amount of approximately NIS9 million. The Plaintiff alleges that the description of certain products sold at Mega's Internet site for online shopping, containing words such as "Fresh", "Natural" and/or "Without Sugar" is misleading and does not meet standards required by law. In the opinion of the Company, based on the opinion of its legal advisers, the possibility that the claim will be rejected exceeds 50%. Accordingly, the Company did not make any provision for this claim in its financial statements. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Phone Services Suit Settlement Approved in Jan. -------------------------------------------------------------- The settlement of a purported class action lawsuit over free phone services was approved in January 2013, according to Alon Holdings Blue Square - Israel Ltd.'s April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. On August 10, 2011, Dor Alon Energy In Israel (1988) Ltd. received a letter of claim and a motion for approval of action as class action against a subsidiary of Dor Alon and its subsidiary for a total amount of NIS2.5 thousand. The letter of claim argued that pursuant to the Consumer Protection Law, 1981, the defendants are obligated to provide their customers free phone services for a call in connection with complaints about products or services provided by the defendants. The Company and the claimant settled the claim pursuant to which the Company will pay an immaterial amount to the claimant. In January 2013, the settlement was approved by court. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Plaintiff Appeals Fueling-Related Suit Dismissal --------------------------------------------------------------- A plaintiff appealed the dismissal of a class action lawsuit filed against a subsidiary of Alon Holdings Blue Square - Israel Ltd., according to the Company's April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. A class action was lodged against Dor Alon Energy In Israel (1988) Ltd. and other fuel companies in December 2007. The total amount of the claim is NIS132 million (the subsidiary's share in this amount is NIS8.8 million). The claimant asserts that the defendants charged each customer NIS2 for filling on Saturdays and on holidays. In February 2013, the claim was dismissed by the court and on April 14, 2013, the claimant appealed to the court. In the opinion of the Company, based on the opinion of its legal advisers, the chances that the claim will be rejected exceed 50%. Accordingly, the Company did not make any provision for this claim in its financial statements. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Ready-Made Cakes & Cookies-Related Suit Withdrawn ---------------------------------------------------------------- A purported class action lawsuit related to ready-made cakes and cookies products was withdrawn in November 2012, according to Alon Holdings Blue Square - Israel Ltd.'s April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. On November 4, 2012, a letter of claim and motion for approval as a class action was filed against the Company's wholly-owned subsidiary, Mega Retail Ltd., and a manufacturer and supplier of ready-made cakes and cookies products for an aggregate amount of approximately NIS5 million. The Plaintiff claims that the defendants failed to properly mark certain products sold by them which contain artificial food colorings with the Hebrew name of such food colorings on the product's label, as required by law. In November 2012, the plaintiff's request to withdraw the claim was approved by the court. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Reviews Suit vs. Mega Over Excessive Charges ----------------------------------------------------------- Alon Holdings Blue Square - Israel Ltd. is currently reviewing a purported class action lawsuit alleging its subsidiary charged sums exceeding the maximum sums permitted by law, according to the Company's April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. In March 2013, a letter of claim and motion for approval as a class action was filed against the Company's wholly-owned subsidiary, Mega Retail Ltd., alleging that Mega charged sums exceeding the maximum sums permitted by law for certain butter, milk and sour cream products. The claim does not state the amount sought. The Company is currently reviewing the Claim and denying all allegations. However, at this time, given this matter is preliminary in nature, the Company's financial statements currently do not provide for any amount. The Company will continue to assess this matter as the request for the class action develops. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Settlement of Consumer Law Violation Suit Approved ----------------------------------------------------------------- Alon Holdings Blue Square - Israel Ltd.'s settlement of a purported class action lawsuit against a subsidiary alleging violation of the Consumer Protection Law has been approved, according to the Company's April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. In January 2012, a claim and a request to recognize it as a class action were filed against Eden Teva Market, a Company subsidiary, regarding the alleged violation of the Consumer Protection Law and regulations, by not marking the price per weight unit of certain products, which are packed by Eden Teva. If the claim is approved as a class action, the approximate claim is estimated by the plaintiff at approximately NIS5 million. The Company and the claimant settled the claim as a result of which the Company paid an immaterial amount to the claimant. The settlement has been approved by the court. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Settlement of Suit Over "Economy Packs" Approved --------------------------------------------------------------- Alon Holdings Blue Square - Israel Ltd.'s settlement of a purported class action lawsuit against its subsidiary relating to "economy packs" labels was approved in April 2013, according to the Company's April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. In July 2011, a letter of claim and a motion for approval of action as class action was filed against the Company's wholly- owned subsidiary, Mega Retail Ltd., claiming that Mega Retail has unjustly enriched itself at the expense of the consumers by selling large packages of goods, which are labeled as "economy packs," but has not lowered the price of the larger package, thus, forcing the consumers to buy a more expensive product instead of sufficing for an ordinary package. The appellant argues that the financial damage incurred by all class members is NIS15 million. The appellant further argues that the class suffered a non- monetary damage which it did not quantify. The court was also asked to issue an affirmative order to instruct the respondent to price its products according to the labeling as an "economy package". In April 2013, the court approved a settlement agreement entered into between the parties. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Settlement of Suit Over Unconsumed Gas Approved -------------------------------------------------------------- Alon Holdings Blue Square - Israel Ltd.'s settlement of a purported class action lawsuit over unconsumed gas in containers was approved in March 2013, according to the Company's April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. On March 22, 2009, a class action was filed against a subsidiary of Dor Alon Energy In Israel (1988) Ltd. and other gas companies; the amount of the claim is NIS821 million (Dor Alon's subsidiary's share in the said amount is NIS32 million). In the statement of claim it is asserted that when the defendants replace a gas container to the consumer the container still contains a certain volume of gas, which is later used by the defendants. According to the claimants, the defendants fully charge the claimants for the gas in the container but the consumers do not use all of the gas they pay for, since some of the gas is taken back by the defendants. In March 2013, a settlement between the parties was approved by the court. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Settlement of Suit Over White Cheese Packages OK'd ----------------------------------------------------------------- Alon Holdings Blue Square - Israel Ltd.'s settlement of a purported class action lawsuit relating to its subsidiary's 500- gram and 750-gram white cheese packages was approved in April 2013, according to the Company's April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. In July 2011, a letter of claim and a motion for approval of action as class action was filed against the Company's wholly- owned subsidiary, Mega Retail Ltd., claiming that Mega Retail misleads its consumers to think that the 500 gram and 750 gram white cheese packages manufactured by Strauss Group and Tnuva Corporation, which are labeled as "Economy Packs" are sold at a discount compared to 250-gram packages. The appellant argues that the damage incurred by all members of the class totals approximately NIS28 million. It has also requested to issue an affirmative order to instruct Mega Retail to provide its clients, who buy the larger packages, a significant discount of at least 20% compared to the price per unit of the product in the smaller package. In the opinion of the Company, should it be obligated to pay any amount with regard to this matter, it is not expected to be a material sum. In April 2013, the court approved a settlement agreement entered into between the parties. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Still Defends Suit Over Weight of Product Packages ----------------------------------------------------------------- Alon Holdings Blue Square - Israel Ltd. continues to defend itself against a purported class action lawsuit alleging it does not deduct the weight of the package in which it sells its products, according to the Company's April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. In October 2011, a letter of claim and a motion for approval of action as a class action was filed against the Company, alleging that the Company does not deduct the weight of the package in which it sells different products, such as various meat and poultry products, fruit and vegetables. If the claim is approved as a class action, the approximate claim is estimated by the plaintiff at approximately NIS181 million. In the opinion of the Company, based on the opinion of its legal advisers, the chances that the claim will be rejected exceed 50%. Accordingly, the Company did not make any provision for this claim in its financial statements. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Suit Over 1994 Cartel vs. Unit Remains Pending ------------------------------------------------------------- On December 3, 2003, a claim was filed in the amount of NIS450 against the gas companies (including a subsidiary of Dor Alon Energy In Israel (1988) Ltd., a subsidiary of Alon Holdings Blue Square - Israel Ltd.) alleging that the defendants were parties to a cartel, which they entered into beginning in 1994 (and even prior thereto) and up to 2003, in the course of which the Restrictive Practices Authority gave notice of a recommendation to file charges against the gas companies and their managers in connection with the existence of a cartel, as stated. The plaintiff contends that by means of the alleged cartel the gas companies collected unfair and unreasonable prices. A request for certification of the claim as a class action pursuant to the Restrictive Practices Law, the Consumer Protection Law and Rule 29 of the Rules of Civic Procedure (1984), was filed together with the claim. The amount of the class action was set by the requesting party at an amount of at least NIS1 billion, along with punitive damages. The subsidiary of Dor Alon has submitted its response to the request for certification of the claim as a class action. The parties twice reached a compromise agreement that was submitted to Court's approval. However, the Court rejected the two compromise agreements and therefore the legal procedures continue. No further updates were reported in the Company's April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. In the opinion of the Company, based on the opinion of its legal advisers, the chances that the claim will be rejected exceed 50%. Accordingly, the Company did not make any provision for this claim in its financial statements. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Suit Over Alonit Stores' Product Labels Withdrawn ---------------------------------------------------------------- A plaintiff's request to withdraw a purported class action lawsuit over labels on products in Alonit stores was accepted in August 2012, according to Alon Holdings Blue Square - Israel Ltd.'s April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. On October 23, 2011, Dor Alon Energy In Israel (1988) Ltd. received a letter of claim and a motion for approval of action as class action against Dor Alon and a subsidiary of Dor Alon for a total amount of NIS6 million. The letter of claim argued that pursuant to the Consumer Protection Regulation (Price per unit of measure), 2008, the subsidiary is obligated to label the products in Alonit stores with a price per unit of measure in addition to the total price. In August 2012, the court accepted the plaintiff's request to withdraw the claim. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Suit Over Font Size of Written Ads Dismissed ----------------------------------------------------------- A purported class action lawsuit over the font size of written advertisements filed against a subsidiary of Alon Holdings Blue Square - Israel Ltd. was dismissed in March 2013, according to the Company's April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. On May 25, 2012, a letter of claim and motion for approval as a class action was filed against the Company's wholly-owned subsidiary, Mega Retail Ltd., claiming that Mega is in breach of regulations of the Consumer Protection Law with respect to the font size of the terms of sale in written advertisements. The appellant argues that the financial damage incurred by all class members is NIS15 million. In March 2013, the claim was dismissed by the court. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Suit Over Food Products With Fluids Withdrawn ------------------------------------------------------------ The withdrawal of a purported class action lawsuit alleging that Alon Holdings Blue Square - Israel Ltd. and its subsidiary failed to properly mark the prices of food products that are saturated with fluids was approved in February 2013, according to the Company's April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. On July 15, 2012, a letter of claim and motion for approval as a class action was filed against the Company and its wholly-owned subsidiary, Mega Retail Ltd., for an aggregate amount of approximately NIS314 million. The Plaintiff claims that the defendants failed to properly mark prices per weight unit of certain food products that are saturated with fluids. It is claimed that the net weight of the product should be marked after reducing the weight of the fluids, and that by not reducing the fluids it is impossible to compare the price per weight unit of different types of the product (for example canned products compared to frozen or fresh products of the same type). In February 2013, a request to withdraw the claim was approved by the court. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Suit Over Ingredient Markings Withdrawn in March --------------------------------------------------------------- A purported class action lawsuit alleging that several food products sold at a subsidiary of Alon Holdings Blue Square - Israel Ltd. are not marked properly to reflect the content percentage of the significant ingredient of the product was withdrawn in March 2013, according to the Company's April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. On October 11, 2012, a letter of claim and motion for approval as a class action was filed against the Company's wholly-owned subsidiary, Mega Retail Ltd., and a certain food supplier, for an aggregate amount of approximately NIS86 million. The Plaintiff claims that several food products sold at Mega supermarkets are not marked properly to reflect the content percentage of the significant ingredient of the product, such as the percentage of fish in "fish burgers," the percentage of corn in "corn schnitzel," etc. In addition to the compensation sought, the plaintiff's request is that the court would issue a declaratory relief and a mandatory order to mark the products as required by law. In March 2013, a request to withdraw the claim was approved by the court. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Suit Over Sales at Kfar Hasha'ashuim Withdrawn ------------------------------------------------------------- A plaintiff's withdrawal of a purported class action lawsuit arising from special sales held at "Kfar Hasha'ashuim" brand toy stores was accepted in November 2012, according to Alon Holdings Blue Square - Israel Ltd.'s April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. In May 2011, a claim and a request to recognize the claim as a class action was filed against the Company regarding special sales held at "Kfar Hasha'ashuim" brand toy stores operated by the Company's 100% wholly owned subsidiary, Bee Group Retail Ltd. According to the claimant, the toy stores misled their customers by not presenting the prices charged for products prior to the special sales, as required by law, in addition to the special sales prices. The claimant estimates the damage to the group of claimants for the purposes of the claim at NIS30 million. The Company says it will continue to assess this matter as the request for the class action develops. In November 2012, the plaintiff's request to withdraw the claim was accepted by the court. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Suit Over Sugared Fruit Products Withdrawn in Dec. ----------------------------------------------------------------- A mutual request to withdraw a purported class action lawsuit related to sugared fruit products with food coloring was approved in December 2012, according to Alon Holdings Blue Square - Israel Ltd.'s April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. On July 1, 2012, a letter of claim and motion for approval as a class action was filed against the Company's wholly-owned subsidiary, Mega Retail Ltd., and Din Marketing and Roasting Ltd., at an aggregate amount of approximately NIS3 million of monetary damages and approximately NIS2.5 non-monetary damages. The plaintiff claims that the defendants sell sugared fruit products with food coloring as "dried fruits," and therefore are in breach of a standard forbidding adding food coloring to dried fruits and in breach of the Consumer Protection Law. The products are sold under the private label of Mega. In December 2012, a mutual request to withdraw the claim was approved by the court. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Tenant Suit vs. Dor Alon Dismissed in February ------------------------------------------------------------- A purported class action lawsuit filed by a tenant of an apartment building against Alon Holdings Blue Square - Israel Ltd.'s subsidiary was dismissed in February 2013, according to the Company's April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. On November 3, 2010, a claim and a request to approve the claim as a class action was issued against a subsidiary of Dor Alon Energy In Israel (1988) Ltd. and other gas companies (the share of Dor Alon's subsidiary was estimated at NIS4 million). The issue in the claim is the alleged cooperation between the gas companies and apartment builders which requires tenants to enter into contracts with a certain gas supplier in a way the tenant allegedly overpays the gas company. In February 2013, the claim was dismissed by the court. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Unit Accused of Violating Sanitarian Standards ------------------------------------------------------------- A subsidiary of Alon Holdings Blue Square - Israel Ltd. is accused of failing to comply with law requirements regarding sanitarian standards of lavatories at its petrol stations, according to the Company's April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. On September 3, 2012, a letter of claim and motion for approval as a class action was filed against Dor Alon Energy In Israel (1988) Ltd. and a subsidiary of Dor Alon, for an aggregate amount of NIS50 million. The plaintiff claims that Dor Alon failed to comply with law requirements regarding sanitarian standards of lavatories at its petrol stations, particularly cleaning requirements and intactness of facilities. In the opinion of the Company, based on the opinion of its legal advisers, the chances that the claim will be rejected exceed 50%. Accordingly, the Company did not make any provision for this claim in its financial statements. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Unit Defends Suit Alleging Breach of Regulations --------------------------------------------------------------- Alon Holdings Blue Square - Israel Ltd.'s subsidiary is defending a purported class action lawsuit alleging breach of the Arrangements in the State Economy Regulations, according to the Company's April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. On June 24, 2012, a letter of claim and motion for approval as a class action was filed against New Dorgaz Ltd., a subsidiary of Dor Alon Energy In Israel (1988) Ltd. ("Dorgaz"), at an aggregate amount of approximately NIS42 million. The plaintiff claims that Dorgaz is in breach of the Arrangements in the State Economy Regulations that require that at the time of termination of a contract between a gas supplier and a client that the deposit payments be returned linked to the Israeli Consumer Prices Index. In the opinion of the Company, based on the opinion of its legal advisers, the chances that the claim will be rejected exceed 50%. Accordingly, the Company did not make any provision for this claim in its financial statements. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Unit Defends Suit by Series A Debenture Holders -------------------------------------------------------------- Alon Holdings Blue Square - Israel Ltd. continues to defend a subsidiary from a purported class action lawsuit brought by holders of its Series A debentures, according to the Company's April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. On June 27, 2010, a statement of claim and a request to approve the claim as a class action and as a derivative claim was filed against Dor Alon Energy In Israel (1988) Ltd., members of the Board of Directors of Dor Alon and Alon Israel Oil Co. Ltd. ("Alon"). The claim was lodged by holders of Series A debentures of Dor Alon that wish to represent the holders of Series A Dor Alon debentures as of February 7, 2010, who did not convert the debentures into Dor Alon shares. In their claim, the plaintiffs claim that the distribution (on February 9, 2010) of the shares of Alon Natural Gas Exploration Ltd. to Dor Alon's shareholders was an unlawful distribution. The plaintiffs also claim that Dor Alon should have adjusted the Series A debentures' conversion rate following the distribution of shares. The plaintiffs request that the Court would oblige Alon and the members of Dor Alon's Board of Directors to return to Dor Alon the shares that were distributed; alternatively, the plaintiffs request that Dor Alon will be required to adjust the conversion rate of the debentures to the "Ex rate" subsequent to the distribution; alternatively, the plaintiffs seek damages for non adjustment of the conversion rate. In the opinion of the Company, based on the opinion of its legal advisers, the chances that the claim will be rejected exceed 50%. Accordingly, the Company did not make any provision for this claim in its financial statements. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Units Face Suit Over Baby Mattress Certification --------------------------------------------------------------- Alon Holdings Blue Square - Israel Ltd.'s subsidiaries are facing a purported class action lawsuit alleging the baby mattresses they sold never received safety certification, according to the Company's April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. On September 24, 2012, a letter of claim and motion for approval as a class action was filed against a subsidiary of Mega Retail Ltd., Dr. Baby Marketing and Distribution (888) Ltd., Company's subsidiary Bee Group Retail Ltd, and a manufacturer of baby products, for an aggregate amount of approximately NIS135 million. The plaintiff claims that baby mattresses sold by the defendants as bearing a safety certificate issued by the Standards Institution of Israel, never received any such approval. In the opinion of the Company, based on the opinion of its legal advisers, the possibility that the claim will be rejected exceeds 50%. Accordingly, the Company did not make any provision for this claim in its financial statements. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Vending Machines Suit vs. Units Withdrawn in Feb. ---------------------------------------------------------------- A plaintiff's request to withdraw a purported class action lawsuit related to automatic cigarette vending machines was accepted in February 2013, according to Alon Holdings Blue Square - Israel Ltd.'s April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. On August 11, 2011, Dor Alon Energy In Israel (1988) Ltd. received a letter of claim and a motion for approval of action as class action against Dor Alon, a subsidiary of Dor Alon and others for a total amount of NIS33 million. The letter of claim argued that the defendants violated the provisions of the law which prohibits selling tobacco products to minors by placing automatic cigarette vending machines in the filling stations operated by the defendants even though the automatic vending machines are not owned and/or operated by Dor Alon or its subsidiary. In February 2013, the court accepted the plaintiff's request to withdraw the claim. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Withdrawal of "Ski" Soft White Cheese Suit Okayed ---------------------------------------------------------------- A request to withdraw the claim in a purported class action lawsuit related to "Ski" soft white cheese was approved in March 2013, according to Alon Holdings Blue Square - Israel Ltd.'s April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. In July 2011, a letter of claim and a motion for approval of action as class action was filed against the Company's wholly- owned subsidiary, Mega Retail Ltd., claiming that Mega Retail charged higher prices than it should have charged on packs that contain two boxes of "Ski" soft white cheese produced by Strauss Group and sold in cardboard packs, and contrary to its promise that the discount would account to 20% of the price of "Ski" boxes of 500 grams, granted an actual discount of only 3%, causing the consumers to pay NIS3.73 more than they should for each pack. The appellant claims that as a result of not being given the discount by Mega Retail the damage incurred by the class members is approximately NIS19 million per month. The court was also asked to issue an affirmative order to instruct the respondent to grant to the consumers who buy the larger packages a significant discount of at least 20% relative to the price per unit of the product in the smaller package. In March 2013, a request to withdraw the claim was approved by the court. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Withdrawal of Choking Hazard Warnings Suit OK'd -------------------------------------------------------------- A mutual request to withdraw the claim in a class action lawsuit alleging violations of regulations on choking hazard warning on products was approved in June 2012, according to Alon Holdings Blue Square - Israel Ltd.'s April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. In December 2011, a letter of claim and a motion for approval of action as a class action was filed against the Company's 51% subsidiary, Eden Briut Teva Market Ltd. ("Eden") and additional food supplier, alleging that Eden and the additional food supplier are violating the Public Health (Food) Order [new version], 5643- 1983 and its regulations, according to which certain products must be marked with a choking hazard warning. If the claim is approved as a class action, the plaintiff claims it should apply to all Eden customers that purchased products which should be marked as such, including any customer who had bought such products by way of bulk. If the claim is approved as a class action, the approximate claim is estimated by the plaintiff at approximately NIS10 million. In June 2012, a mutual request to withdraw the claim was approved by the court. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Withdrawal of Egg-Noodle Products Suit Approved -------------------------------------------------------------- The withdrawal of a purported class action lawsuit against a subsidiary of Alon Holdings Blue Square - Israel Ltd. related to egg-noodle products was approved in December 2012, according to the Company's April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. On September 13, 2012, a letter of claim and motion for approval as a class action was filed against the Company's wholly-owned subsidiary, Mega Retail Ltd., Shufersal Ltd. and certain food suppliers, for an aggregate amount of approximately NIS12 million. The Plaintiffs claim that the defendants, who produce, import and/or market egg-noodle products, failed to properly mark these products with required information regarding the quantity of eggs they contain. It is claimed that the products do not contain the minimum required quantity of eggs for them to be labeled as "Egg- Noodles", as required by the applicable Israeli formal standard. It is further claimed that the information regarding the ingredients of such products is per 100 gram dry product, when it should be made per 100 gram cooked product. In December 2012, a mutual request to withdraw the claim was approved by the court. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Withdrawal of Petrol Temperature Suit Granted ------------------------------------------------------------ A plaintiff's request to withdraw a purported class action lawsuit relating to petrol temperature against a subsidiary of Alon Holdings Blue Square - Israel Ltd. was granted in November 2012, according to the Company's April 29, 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 and an application for approval of the claim as a class action was filed with the District Court in Tel Aviv against Dor Alon Energy In Israel (1988) Ltd., and other fuel companies in the total amount of approximately NIS197 million. The issue in the claim is differences in temperature of the petrol between the moment it is acquired by the fuel companies and the moment it is sold to the customers, in a way that misstates the amount of energy sold to the customers and this way, according to the claimant, the fuel companies profit millions of NIS per annum. In November 2012, the court accepted the plaintiff's request to withdraw the claim. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Withdrawal of Price Per Unit Marking Suit OK'd ------------------------------------------------------------- The withdrawal of a purported class action lawsuit alleging that Alon Holdings Blue Square - Israel Ltd.'s subsidiary failed to properly mark products sold by it with the price per unit of measure was approved in April 2013, according to the Company's April 29, 2013, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. On November 25, 2012, a letter of claim and motion for approval as a class action was filed against the Company's wholly-owned subsidiary, Mega Retail Ltd., for an aggregate amount of approximately NIS2.8 million. The Plaintiff claims that the defendant failed to properly mark products sold by it with the price per unit of measure, in addition to the total price of the product. On April 8, 2013, the court accepted the plaintiff's request to withdraw the claim. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. ALON HOLDINGS: Withdrawal of Water Contamination Suit Approved -------------------------------------------------------------- The withdrawal of a purported class action lawsuit alleging contamination of ground water in Israel was approved in November 2012, according to Alon Holdings Blue Square - Israel Ltd.'s April 29, 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 and an application for approval of the claim as a class action was filed with the District Court in Tel Aviv against Dor Alon Energy In Israel (1988) Ltd., a subsidiary of Dor Alon and the three largest fuel companies in the total amount of approximately NIS200 million. The claim was filed arguing that liquid oil in the pipes and petrol tanks caused the contamination of ground water. According to the claimants the fuel companies did not adhere to the guidelines of the Environment Ministry and did not check the filling installations were waterproof. In November 2012, a request to withdraw the claim was approved by the court. Alon Holdings Blue Square - Israel Ltd. -- http://www.bsi.co.il/- - operates supermarkets, food retailers and a chain of filling stations and convenience stores. The Company also owns, leases and develops yield-generating commercial properties and residency projects. The Company is headquartered in Rosh Ha'ayin, Israel. AMERICAN INTERNATIONAL: In Debate Over Viability of Claims ---------------------------------------------------------- John Caher, writing for New York Journal, reports that after eight years of litigation and roughly $1.7 billion in federal court settlements and fines, is there any authority -- or even any point -- in continuing to pursue former American International Group officials in a state civil enforcement action? That was the underlying question on May 28 before the Court of Appeals as attorneys for the state and former AIG leaders Maurice "Hank" Greenberg and Howard Smith debated the continued viability of claims brought under New York investor protection laws. Attorney General Eric Schneiderman, following the lead of two predecessors, is attempting to hold Messrs. Greenberg and Smith accountable for sham transactions orchestrated years ago by AIG. But Mr. Schneiderman's claims under the Martin Act and Executive Law Sec. 63 were undercut by the settlement in April of a parallel federal claim. The state has dropped its claim for damages and is instead focusing on injunctive and equitable relief. David Boies of Boies, Schiller & Flexner, for Greenberg, acknowledged that his trial court motion for summary judgment on the injunctive relief was denied. But he still argued that the attorney general never pursued the injunctive/equitable angle until it was essentially forced to withdraw its damages claim in the wake of a $115 million class action settlement approved by Southern District Judge Deborah Batts in April. "This case has entirely changed," Mr. Boies argued. "This is a case they argued one way below, they didn't preserve the arguments they are making to this court now and what they are trying to do is somewhat keep this case alive so they can delve into it more after eight years of not finding anything." Judge Victoria Graffeo asked, "Why isn't the attorney general entitled to delve deeper into this issue?" Judge Robert Smith pondered whether a jury should consider whether Greenberg's subordinates would "do a crooked deal without asking him." But he also pressed Solicitor General Barbara Underwood on whether the state has anything to gain from pursuing Greenberg and Smith since it withdrew its damages claim. "At this point in this case, from your point of view, isn't there a symbolic aspect to it?" Judge Smith asked. "Aren't you really looking for a moral victory here?" Ms. Underwood said she is "looking to protect the markets of New York from fraud, to hold him accountable" and stressed that none of the claims raised initially were abandoned. Judge Smith cut her off. "What will happen to the citizens of New York if this case gets dismissed?" Judge Smith asked. "You want to show the citizens of New York that these people can't get away with it." Ms. Underwood responded, "I think one thing that will happen to the citizens of New York is they will see it is possible to avoid responsibility for fraud." Ms. Underwood said that if the case proceeds the state could still seek disgorgement of "performance based compensation," apparently a reference to bonuses. "We would look to bar [Greenberg] from the securities industry," Ms. Underwood said. "We would look to bar them from serving as officers and directors of public companies . . . We are also looking for disgorgement of ill-gotten gains." The case began in 2005, when then attorney general Eliot Spitzer deployed the Martin Act to go after Greenberg and Smith, accusing them of orchestrating two fraudulent reinsurance transactions to hide AIG's declining financial status from its investors. AIG removed Greenberg as its CEO and admitted structuring sham transactions to boost its loss reserves. The company paid a $1.6 billion fine. But the state Attorney General's Office continued to seek relief for investors under New York's broad investor protection laws. Many of the claims were thrown out. But last year a divided panel of the Appellate Division, First Department, allowed the Martin Act and Executive Law claims to proceed, despite the defendants' assertions that the state laws were preempted by federal statute. The First Department granted leave to the Court of Appeals, but it is unclear if the preemption issue is moot with the Southern District settlement. Mr. Boies said it is no longer relevant. Andrew Tomback, a partner at Zuckerman Spaeder who has been following the case closely and has written about it for the New York Law Journal, said the attorney general has little to gain at this point by continuing the case. "Even if Schneiderman ultimately manages to prevail, if it's a victory at all, it's pyrrhic at best," Mr. Tomback said. "As for enjoining Hank Greenberg, with all due respect at this point in his career it is akin to telling Bill Russell he's banned from basketball." Vincent Sama of Kaye Scholer argued for Mr. Smith. Chief Judge Jonathan Lippman recused himself for undisclosed reasons, and was replaced by Justice William Mastro of the Appellate Division, Second Department. The case has attracted a plethora of amici. Connecticut and Vermont are urging the court to allow the case to go forward on the state claims, as is the AARP. On the other side, the U.S. Chamber of Commerce and other business groups, as well as a group of former public officials including former Governor George Pataki, former Massachusetts Governor William Weld and former New York City Mayor Rudolph Giuliani, want the case thrown out. Amici for the AIG defendants contend that the national regulatory framework for securities enforcement would be thrown into disarray if Judge Schneiderman is allowed to pursue Messrs. Greenberg and Smith under state law. AMYRIS: Securities Class Action Over Biofene Production Baseless ---------------------------------------------------------------- Maxx Chatsko at Motley Fool reports that an investor was bringing a lawsuit against the company with Milberg LLP. According to Motley Fool's Chatsko, "While I do think Amyris management got a little ahead of itself in early projections, I also think this lawsuit is baseless." The accusations The lawsuit claims that Amyris and management violated the Securities and Exchange Act of 1934 between April 29, 2011 and Feb. 8, 2012. The company is accused of "making false and misleading statements regarding its ability to sustain commercial production of Biofene." Biofene is the company's renewable form of farnesene, a building-block molecule that can be refined into thousands of value-added chemicals including high-value squalane for cosmetics. And, of course, the share price dropped considerably (otherwise, there would be no lawsuit). Commercial reality On May 5, 2011, the company released its production timeline, which turned out to be the biggest mistake it ever made. Management claimed that it would produce 6-9 million liters of Biofene in 2011 and 40-50 million liters in 2012. After running into contamination, scalability, and separation issues, actual production volumes totaled much less than that. Those projections sure look laughable now, but at the time Amyris had a healthy stable of production facilities online or under construction. Third-party manufacturers were producing Biofene in North Carolina, Spain, Brazil, and elsewhere. The company was also building its own commercial-scale facilities in Sao Paulo, Brazil: one in Brotas (currently operating) and one with Usina Sao Martinho (construction on hold). Couple the challenge of scaling an industrial biotech platform -- remember, this industry is walking into the unknown -- with less than efficient financial operations and you get the current state of affairs. Contract manufacturers were axed to save money and the facility at Brotas seems to have been scaled down from its ambitious targets. The biorefinery employs six 200,000 liter bioreactors -- fewer than the 240,000 liter tanks operated at some contract sites. Lesson learned The financial situation at Amyris is less than enviable. Whereas fellow industrial biotech company Solazyme has hit every major milestone and had no problem raising funds, Amyris has had to take the more dilutive route for shareholders. Still, large commercial partners Total and Cosan haven't backed down in their support of the company. Total upped its investment in Amyris during several rough patches in the past year after incurring significant paper losses on the roughly 20% stake in the company. Total even has its own webpage for the partnership, which speaks to its long-term vision for Amyris' platform, especially in renewable diesel. Cosan has expanded its joint venture Novvi as recently as March. Many industrial biotech companies have chased cheap feedstock sources for initial operations, which makes Brazil's sugarcane an easy target. Similarly, sugar producers can diversify their businesses by investing in industrial biotech. Cosan is looking to steer production away from sugar (commodity) and ethanol and into higher-value lubricants and base chemicals with Amyris' platform. In recent months, Amyris has also courted Firmenich, Givaudan, and International Flavors and Fragrances for (ahem) flavors and fragrances and expanded product development with Kuraray for polymers and plastics. Mr. Chatsko said "To say that international manufacturing companies are excited about the company's products is an understatement. It will take time for the company to get on sturdy financial footing, but I'm cautiously optimistic Amyris has a bright future ahead of it." Foolish bottom line "It doesn't look like management intentionally misled investors. Instead, the group likely underestimated the challenge of growing its yeast at commercial scale. It also doesn't look very good for the investor to bring the lawsuit almost 16 months after the period that caused him or her so much financial pain. This is just a reminder of what can happen when you invest in a developmental-stage company in a nascent industry. My advice: Take a long-term approach, don't lose sleep over pops and drops, and don't bring about lawsuits over movements in share price that occur during a 10-month period." AU OPTRONICS: Supreme Court Grants Review of Mississippi vs. Au --------------------------------------------------------------- Marcia Coyle, writing for The National Law Journal, reports that the U.S. Supreme Court on May 28 broke a recent string of unanimous decisions by dividing 5-4 in two prisoners' cases. Is it an inkling of what is to come when June arrives? After the long Memorial Day weekend, the justices got off to a slow start with those two rulings out of 30 pending cases and two grants of review, one involving a circuit split over state- initiated mass actions and the Class Action Fairness Act (Mississippi v. AU Optronics Corp.). The court's potential blockbuster affirmative action challenge -- Fisher v. University of Texas-Austin -- remains the oldest outstanding case. It was argued in the first session of the term in October. CHULA VISTA, CA: Settles Utility Tax Class Action for $8 Million ---------------------------------------------------------------- Allison Sampite-Montecalvo, writing for UTSanDiego.com, reports that the first of three meetings to explain how eligible taxpayers could submit claims for a piece of an $8 million lawsuit settlement attracted a handful of people with questions about the process and criticism for the city of Chula Vista. The proposed settlement ends a class-action suit by wireless phone users against the city. The June 2011 lawsuit challenged a 5 percent fee the city collected from phone customers under the city's 1970 utility users tax. The suit said the tax was not meant to apply to wireless phone service, and the settlement was reached in April when a San Diego Superior Court judge gave preliminary approval in favor of taxpayers. The $8 million will be used to pay refunds, litigation expenses and attorneys' fees. Eligible residents can expect a rebate ranging from $35 to hundreds of dollars. Dan Hutne, 47, is expecting about $208 back, but said he's discouraged by the claim process and others may be, too. "We've got to jump through hoops to get it back," Mr. Hutne said at the meeting may 20 at the civic center library. "It's wrong. We've been disenfranchised of our money." In November 2010 the city attempted to update the language of its utility laws through Proposition H, which would have applied the tax to newer forms of communication but voters defeated the proposal. Two Chula Vista residents, Carla Villa, 41, and Vanessa Garza, 36, then brought a lawsuit forward, which was filed by the law offices of CaseyGerry and Capretz & Associates. Ms. Villa and Ms. Garza said the lawsuit is about defending resident rights. "The benefit of it is showing the city it's not right to be charged this tax," Ms. Garza said. Ms. Villa said she and Ms. Garza thought the tax was injustice. "It was always our hope that we would win the lawsuit and hopeful that the facts would speak for itself," she said. Under terms of the agreement, refunds are available to Chula Vista wireless phone users who paid the city's utility users tax on their wireless phone bills between April 2010 and April 2013. CaseyGerry attorney Jason Evans and Jim Capretz of Capretz & Associates answered questions from residents at the May 20 meeting and helped residents fill out claim forms. Chula Vista resident Tony Davis attended to see if he is eligible for a rebate and to bring information back to friends who may be affected. Mr. Capretz said the settlement gives eligible residents the opportunity to collect money that should have never been paid in the first place and any concerns should be expressed to the City Council during meetings. "You have to speak up and be heard and that's exactly what should be done in this situation," he said. The attorneys anticipate refunds will be disbursed sometime in December but won't know for sure until a September hearing where the judge is expected to give final approval. "Before this there's an appeal process and a chance for people to object," Mr. Capretz said. "If someone files an appeal it could take much longer." CVS CAREMARK: Investors Obtain Favorable Ruling in Class Action --------------------------------------------------------------- Jan Wolfe, writing for The Litigation Daily, reports that plaintiffs lawyers at Robbins Geller scored back-to-back appellate victories in the First and Sixth Circuits, reversing defense wins for Davis Polk and Winston & Strawn in class action lawsuits against CVS Caremark and Omnicare Inc. DE BEERS: Consumers Set to Get Class Action Settlement Checks ------------------------------------------------------------- Rob Bates, writing for JCK, reports that consumers who have waited years for their De Beers class action settlement money: Your checks are in the mail. On April 20, Judge Stanley Chesler approved a motion to disburse the $108.7 million in funds slated for consumers who filed claims in the $300 million settlement. According to a court filing by claims administrator Rust Consulting, the average payment amount is $180.75. Payments under $10 were disqualified. Some 606,044 consumer claims have been filed. Of those, 574,860 were deemed eligible. The judge approved a request that the 5,820 valid late claims be allowed. Consumers or industry members who have queries about individual claims or about the process in general should contact the claim administrators at diamondsclassaction.com. The De Beers class action settlement received final court approval last May. The first checks went out to industry members in the "indirect" purchaser class in August. EL AL ISRAEL: Passengers File Class Action Over Cancelled Flight ---------------------------------------------------------------- Sapir Peretz, writing for Globes, reports that passengers whose El Al Israel Airlines Ltd. flight to Thailand was cancelled at short notice last winter are demanding NIS98.5 million compensation according to a class action suit submitted on May 23 to the Tel Aviv District Court for approval. The suit claims that hundreds of passengers, after waiting seven hours on the El Al plane, were told that the flight was being cancelled due to a technical breakdown. The suit also claims that El Al ignored the Aviation Services Law, which seeks to ensure that passengers are given assistance, and compensated for cancelled flights or changed conditions. The claim says, "Despite everything the passengers were not provided with food, drink, two telephone calls and the ability to send faxes or emails as required by law." The class action suit is demanding NIS3,000 compensation for each passenger. The suit claims that at least 10 El Al flights with 350 passengers are cancelled or delayed each month. In addition El Al refuses to fly 150 people per month since the law was enacted nine months ago. The class action calculates that compensating 500 people per month over the past nine months at NIS3,000 per person amounts to NIS 98.5 million. ELECTRONIC ARTS: 3rd Cir. Returns Likeness Case to N.J. Court ------------------------------------------------------------- Steve Berkowitz, writing for USA TODAY Sports, reports that a federal appeals court panel on May 21 overturned a district court ruling that had dismissed a former Rutgers football player's lawsuit against video game manufacturer Electronic Arts for illegally using his likeness and biographical information in its college football games. By a 2-1 vote, judges in the 3rd Circuit returned the case to U.S. District Court in New Jersey for further proceedings consistent with its opinion. Michael Rubin, a lawyer who argued for the plaintiff before the Circuit Court panel, said on May 22 that when the case resumes at the district court level, his side will file a motion seeking to have the case certified as a class action. EA spokesman John Reseburg said the company intends to "seek further court review." Asked May 22 whether that would mean asking for a review of the case by all judges of the 3rd Circuit or trying to take the case to the Supreme Court, Mr. Reseburg said: "It's too soon to tell." The May 21 opinion, written by Circuit Judge Joseph A. Greenaway Jr., (and a dissent by Judge Thomas L. Ambro) includes observations about some of the same issues being contested in two other federal cases. There is a wider-ranging anti-trust lawsuit before a federal district court in California against EA, the NCAA and Collegiate Licensing Co., the nation's leading collegiate trademark licensing and marketing firm, and a case parallel to that one currently under consideration by the 9th U.S. Circuit Court of Appeals. The anti-trust suit, whose named plaintiffs include former UCLA basketball star Ed O'Bannon, concerns the use of college football and men's basketball players' names and likenesses and is heading toward a hearing June 20 on whether it will certified as a class action. If the O'Bannon case is certified as a class action, it likely would bring thousands of current and former college athletes into the case and potentially place billions of dollars in damages at stake. Meanwhile, three judges from the 9th Circuit are still considering an appeal from EA in a case related to the O'Bannon proceeding that involves former Arizona State and Nebraska quarterback Sam Keller and EA's use of his likeness in video games. The three judges heard arguments on that matter in July 2012. In a footnote to his May 21 ruling, Judge Greenaway wrote that the Keller case "is simply our own case incarnated in California." A transcript of the oral arguments before Mr. Greenaway and the 3rd Circuit panel were entered into the record of the Keller case last October. Also potentially noteworthy about the May 21 ruling: it came after the case had been argued before a panel of judges that included one temporarily assigned to the 3rd Circuit, which has jurisdiction over New Jersey, Delaware and Pennsylvania, from the 9th Circuit, which has jurisdiction over several western states including California. (This judge, A. Wallace Tashima, was not among the judges handling the appeal in the Keller case.) A ruling in EA's favor in the Keller case could set the stage for a Supreme Court review because two federal circuit courts would be in opposition on the same legal issue. The New Jersey case involves Ryan Hart, a Rutgers quarterback for the 2002 through the 2005 seasons. He filed a presumptive class- action suit in November 2009. U.S. District Judge Freda Wolfson dismissed the case in September 2011, saying that EA's use of Mr. Hart's likeness was protected by the First Amendment, which offers a shield to video games as expressive speech. However, Mr. Greenaway wrote: "As with other types of expressive conduct, the protection afforded to games can be limited in situations where the right of free expression necessarily conflicts with other protected rights. The instant case presents one such situation." He noted that EA college football video game's "success owes to its focus on realism and detail" and that "in NCAA Football 2006, Rutgers' quarterback, player number 13, is 6'2" tall, weighs 197 pounds and resembles Hart." Mr. Greenaway, in another part of the opinion, writes: ". . . the digital avatar does closely resemble the genuine article. Not only does the digital avatar match Appellant in terms of hair color, hair style and skin tone, but the avatar's accessories mimic those worn by (Hart) during his time as a Rutgers player. The information, as has already been noted, also accurately tracks (Hart's) vital and biographical details. . . . "The digital Ryan Hart does what the actual Ryan Hart did while at Rutgers: he plays college football, in digital recreations of college football stadiums, filled with all the trappings of a college football game." On a more general basis, Greenaway wrote that EA "seeks to create a realistic depiction of college football for the users. Part of this realism involves generating realistic representations of the various college teams -- which includes the realistic representations of the players." How this could affect the O'Bannon case remains to be seen. For example, a filing made public on May 20 includes portions of a deposition from one of the other named plaintiffs in the case, former Connecticut basketball player Tate George, in which George said that the avatars in several versions of a video game that are supposed to represent him do not resemble him. Mr. George also said the face of his avatar also appears on other players representing other teams. FANNIE MAE: Genesee County Will Go on With Class Action Lawsuit --------------------------------------------------------------- Ron Fonger, writing for MLive.com, reports that County Treasurer Deb Cherry says there's no turning back in the high-profile battle with mortgage giants Fannie Mae and Freddie Mac. The county is the lead plaintiff in a class action lawsuit against the federally chartered mortgage finance companies -- a class action case that's tied directly to a lawsuit filed by Oakland County against the same companies. Oakland County officials previously said they plan to appeal to the Supreme Court in its claim that Fannie Mae and Freddie Mac owe them $1.5 million and the state $10.5 million in taxes. The U.S. 6th Circuit Court of Appeals on May 20 ruled in favor of the mortgage companies, which claim they're exempt from all taxes as government entities. A U.S. district judge last year ruled that the exemption did not apply to state and local real estate transfer taxes and allowed Genesee County to file its class action on behalf of all other counties in the state. "I don't know what the prospects are, but it's an awful lot of money," Ms. Cherry said on May 22. "We will all go forward." The same law firm represents both Oakland and Genesee counties in the lawsuits. Ms. Cherry said the county isn't paying legal fees because the case is being handled on a contingency basis. The treasurer said she has always expected the question about the applicability of the transfer taxes would be decided by the Supreme Court. FRONTPOINT: Faces Suit Over Alleged Libor Manipulation ------------------------------------------------------ Alison Frankel at Thomson Reuters, reports that in April, right after U.S. District Judge Naomi Reice Buchwald of Manhattan dismissed class action antitrust and racketeering claims against the global banks that supposedly colluded to manipulate the benchmark London Interbank Offered Rate (Libor), Daniel Brockett of Quinn Emanuel Urquhart & Sullivan politely said, "I told you so." Mr. Brockett had been pushing an alternate theory of liability against the Libor banks, focused on securities and common-law fraud, not on antitrust violations. And even in the Libor litigation wreckage that resulted from Buchwald's ruling, he said, fraud claims like those filed in March by Freddie Mac's conservator against a dozen Libor banks were still viable. The only catch was that plaintiffs would have to be able to show that they relied on misrepresentations by panel banks, so cases would probably have to be brought by individual investors with big enough losses in Libor-pegged financial instruments to justify the cost of solo litigation. Nevertheless, Mr. Brockett said he believed those investors were out there. On May 21, one of them surfaced. Mr. Brockett filed a 106-page complaint in New York State Supreme Court for Salix Capital, which owns claims belonging to several shuttered hedge funds that once operated under the FrontPoint umbrella. Salix alleges that in 2007 and 2008, the FrontPoint funds engaged in Libor-pegged interest rate swaps with Libor panel banks as part of complex, multi-security deals known as corporate bond basis packages. The swaps were supposed to be a hedge against a global banking crisis, since Libor should have increased as it became more expensive for banks to borrow from one another. Instead, the complaint alleges, the panel banks artificially suppressed Libor, undermining the trading strategy of the FrontPoint funds. The funds "relied on the integrity of how Libor was set and the truthfulness of defendants' representations about how Libor was set in entering into these transactions," the complaint said. "By suppressing Libor, defendants artificially lowered the amount they were contractually obligated to pay to the funds under the interest rate swaps, while still demanding that the funds make the contracted-for (comparatively high) fixed-rate payments. In marketing the basis packages, defendants misrepresented Libor and omitted to disclose their manipulation of Libor." The suit blames Libor manipulation for the FrontPoint funds' big losses in 2008 and eventual demise in 2009, after an avalanche of redemption requests that the complaint attributes to Libor-related losses. (Others have linked the redemption demands to insider trading by FrontPoint principal Chip Skowron.) The funds are asserting common-law fraud and breach of contract against the Libor banks, claiming $250 million in damages from inflated payments to the defendants, reduced payments from the banks and losses that the funds experienced in a liquidation process that they claim was triggered by the banks' bad-faith collateral demands. That seems to be a more focused theory of liability than what we saw in the first Libor securities fraud suit to be filed after the Buchwald antitrust ruling: Charles Schwab's suit in San Francisco Superior Court, claiming unspecified damages for losses on Libor-pegged instruments. "These are tight, targeted fraud claims," Mr. Brockett said in an interview on May 21. Because the FrontPoint funds dealt directly with Libor panel banks, he said, Salix (as the owner of their claims) can show a relationship of privity with the defendants. The complaint also takes care to offer evidence establishing New York state jurisdiction over the claims, which gives Salix the benefit of New York's six-year statute of limitations for fraud and breach of contract. Mr. Brockett wouldn't say if Salix was already a client back in March, when Buchwald dismissed Libor antitrust claims, nor would he say whether Quinn Emanuel has other clients poised to file similar Libor suits. He certainly hasn't stopped fishing for would-be plaintiffs. "There are lots and lots of investors who dealt directly with the panel banks. These are the people we always said have claims," Mr. Brockett said. "This is where the future of Libor litigation exists, if it exists." GREENBERG TRAURIG: Former Shareholder Withdraws Class Action ------------------------------------------------------------ Gina Passarella, writing for The Legal Intelligencer, reports that not many disputes over pay equity in large law firms are taken public through high-profile litigation. And when they are, they often settle for undisclosed terms, as was the case on May 24 when Greenberg Traurig and former shareholder Francine Griesing stipulated the withdrawal of her $200 million gender discrimination putative class action against the firm. But that doesn't mean the issue of disparate compensation between male and female shareholders isn't prevalent throughout the country's largest law firms, experts and survey data say. In her lawsuit, Griesing v. Greenberg Traurig, filed in New York federal district court in December, Mr. Griesing alleged she was told to look for other employment after complaining about Greenberg Traurig's compensation policies, which she said created a "boys' club of origination" that stifled women's ability to generate business and bill as many hours as men. Greenberg Traurig adamantly denied the claims. The two sides said on May 28 only that the matter "concluded amicably." Fine, Kaplan and Black's Roberta Liebenberg is the current chairwoman of the American Bar Association's recently constituted Gender Equity Task Force. As part of the task force's work, it has created tool kits for state and local bar associations on the business case for gender pay equity. The task force is set to publish later this year a manual for law firms called Closing the Gap that will outline ways firms can close the pay gap. It will also publish a similar manual for women general counsel. Ms. Liebenberg said the statistics from surveys done by organizations like the National Association of Women Lawyers, the Minority Corporate Counsel Association and the Project for Attorney Retention all back anecdotal evidence that women partners often make less than their male counterparts. NAWL's annual survey has consistently shown women make less than men in similar positions within a law firm, Ms. Liebenberg noted. Of the 200 largest law firms, about 50 percent have no women among their top 10 rainmakers, she said. "There's a strong correlation between the fact that women are not achieving pay equity commensurate with their male equity partners because that also translates to whether they are getting positions" of real power in a firm, Ms. Liebenberg said, noting attorneys on executive committees and running law firms are often the highest compensated. A joint study in 2010 by the ABA Commission on Women in the Profession, the MCCA and PAR went beyond the fact that women were often paid less and showed women often felt they were bullied for fighting for origination credit. According to responses from the more than 700 female law firm partners who participated in the "Survey of Women Partners on Law Firm Compensation," 55 percent said they were occasionally or frequently denied their fair share of origination credit. And 92 percent said revenue generation was the key factor in attaining equity partnership. Nearly 30 percent of the respondents in that survey said they were subjected to intimidation, threats or bullying to back down from origination point disagreements with their male partners. And 39 percent reported being dissatisfied with how such disputes are resolved at their firms, according to the survey results. Ms. Liebenberg said these surveys touch on the implicit biases that exist within some large firm cultures that lead to pay disparity between male and female shareholders. "I think that this is a real issue for law firms to be focusing on because the issue of pay and equity compensation definitely affects attrition," Ms. Liebenberg said. If there are no senior women in law firm leadership, there are no women role models and mentors to show younger women they can succeed in law firms, Ms. Liebenberg said. "The advancement of women lawyers into equity partnerships and leadership positions within private law firms is of primary concern to NAWL, and is an issue that NAWL has studied for nearly a decade," NAWL President Beth Kaufman said in a statement. "While NAWL does not take a position on private litigation, or on settlements of private litigation, NAWL applauds and encourages all efforts to advance women lawyers into those positions within the profession in which they should be represented." According to Ms. Griesing's complaint, Greenberg Traurig has a closed compensation system in which only CEO Richard Rosenbaum makes all promotion and compensation decisions with advisement from four other male shareholders who serve as the compensation committee. Greenberg Traurig has three shareholder levels, consisting of the 300 level, 500 level and 1,000 level. The 1,000 level is the most highly compensated, and less than 10 percent of that level are female attorneys, according to the complaint. The 1,000-level shareholders get nearly exclusive access to the firm's retreats where they can network and refer business, Ms. Griesing alleged in the complaint. According to the complaint, the 1,000-level shareholders are estimated to earn $1 million more per year than other shareholders. Most new shareholders are placed in the 300 or 500 levels and are required to remain in the 500 level for a certain period of time before becoming eligible for the 1,000 level, according to the complaint. Ms. Griesing was hired at the 300 level, where all but one of the female Philadelphia shareholders were placed. According to the complaint, men with similar or less qualifications were placed in the 500 level. "By assigning women to lower levels and delaying their promotion, the firm denies its female shareholders compensation and opportunities to which they are otherwise entitled," Ms. Griesing alleged in the complaint. She alleged the compensation system lacks sufficient standards, quality controls, implementation metrics, transparency and oversight. Ms. Griesing said she brought in more than $4 million in timekeeper revenues and origination during her time at the firm. She was told that if she generated $600,000 in originations a year, she would receive a $108,000 bonus and that the bonus would increase as the origination increased, according to the complaint. Despite bringing in double the origination, her bonus was only $115,000 in 2008, Ms. Griesing alleged in the complaint. After exhausting other avenues up the food chain in the firm, Ms. Griesing said in the complaint that she was left with no other option but to go to Mr. Rosenbaum. According to the complaint, Mr. Rosenbaum allegedly told Ms. Griesing he would not investigate her claims unless she agreed to be "'happy'" at the firm. Ms. Griesing then filed a complaint with the Equal Employment Opportunity Commission. At a subsequent meeting in June 2009, Mr. Rosenbaum allegedly told Ms. Griesing she needed to leave the firm if she was going to persist in questioning her compensation, according to the complaint. After the meeting, the firm stopped assigning Ms. Griesing work and urged her principal associate to work for another shareholder, according to the complaint. In her December 2009 annual review with Mr. Rosenbaum, Ms. Griesing said Mr. Rosenbaum "chastised" her for filing an EEOC complaint. Mr. Rosenbaum allegedly said he was finding it "'difficult to treat [Griesing] fairly,'" in light of those claims, according to the complaint. On July 28, the EEOC's Philadelphia District Office determined Ms. Griesing had been paid $50,000 less than her nearest male counterpart; that women shareholders were on average compensated less than men at the firm; and men were more likely than women to be hired above level 300. In a subsequent portion of the EEOC finding, District Director Spencer H. Lewis Jr. said he determined there was reasonable cause to believe Greenberg Traurig violated Title VII and the Equal Pay Act by compensating Ms. Griesing and other Philadelphia-based female shareholders less favorably because of their sex. IDEATIONS DIVEALERT: Recalls 2,500 Scuba Dive Signaling Devices --------------------------------------------------------------- The U.S. Consumer Product Safety Commission, in cooperation with Ideations DiveAlert, of Seattle, Washington, announced a voluntary recall of about 2,500 DiveAlert and DiveAlert PLUS signaling devices. Consumers should stop using this product unless otherwise instructed. It is illegal to resell or attempt to resell a recalled consumer product. The signaling device can malfunction when used and restrict the diver's air flow, posing a drowning hazard. No incidents or injuries have been reported. This recall involves DiveAlert and DiveAlert PLUS scuba dive signaling devices with model numbers DA2, DP2 or DV2. The signaling device is attached to the diver's buoyancy compensator device (BCD) power inflator/alternate regulator system by a chrome-plated brass coupling and is used to activate a loud surface horn or an underwater percussion noise to alert others in the event of a diver's emergency. The devices are also used in non-emergencies to get the attention of the pickup boat or other divers. The DA2 is black with an orange button, the DP2 is black with a gray knob and red button and has DiveAlert PLUS printed on it, and the DV2 is black and red. They can be used with Aqualung AirSource, Oceanic Air XS, Aeris Air Link and Mares Air Control regulator/inflators. Only these signaling devices without any stamped writing on the coupling's collar are included in this recall. Pictures of the recalled products are available at: http://is.gd/82XhTE The recalled products were manufactured in the United States of America and sold at dive equipment stores nationwide from July 2009 through May 2013 for between $70 and $90. Consumers should immediately stop using the recalled DiveAlert signaling devices and return them to an authorized DiveAlert dealer or to DiveAlert for a free repair. The repair consists of replacing the defective female coupling. DiveAlert may be reached at (800) 275-4332 from 8:00 a.m. to 5:00 p.m. Pacific Time Monday through Friday, by e-mail at info@divealert.com or online at http://www.divealert.com/and click on Recall for more information. IKEA CANADA: Recalls 6,000 LYDA Jumbo Cups Due to Burn Hazard ------------------------------------------------------------- Starting date: June 5, 2013 Posting date: June 5, 2013 Type of communication: Consumer Product Recall Subcategory: Household Items Source of recall: Health Canada Issue: Product Safety Audience: General Public Identification number: RA-33857 In coordination with Health Canada and the United States Consumer Product Safety Commission (US CPSC), IKEA Canada issued a voluntary recall on the Lyda jumbo cup. Affected products: LYDA jumbo cup This recall involves the LYDA jumbo cup with model number 30203379. The cup is made of stoneware and has a rose design on it. A picture of the recalled products is available at: http://is.gd/OOMbJm The cups can break when hot liquid is poured into them, creating a potential burn hazard. IKEA is aware of twenty reports globally of the cups breaking when hot liquid is poured into them. Ten incidents reported scalding injuries with three of the reported injuries requiring medical treatment. IKEA and Health Canada have not received any reports of incidents or injuries to Canadians resulting from the use of the LYDA jumbo cup. Approximately 6,000 units of the recalled product were sold in Canada. The recalled products were sold from August 2012 to April 2013 in Canada. The recalled cups were manufactured in Thailand. Companies: Distributor IKEA Canada Burlington Ontario, CANADA Consumer should stop using the cup immediately and return it to an IKEA store for a full refund. INDIANA: BMV Admits it May Have Overcharged Driver's Licenses ------------------------------------------------------------- Tim Evans, writing for The Indianapolis Star, reports that the Indiana Bureau of Motor Vehicles admits it "may have inadvertently overcharged a number of Indiana citizens" for driver's licenses, according to a reply in a class-action lawsuit pending in Marion Superior Court. In an answer to the class-action complaint filed by Irwin Levin of the Indianapolis law firm Cohen & Malad, the BMV also "admits that overcharges may have affected a significant number of drivers." The response filed May 15 by the Indiana attorney general said the "BMV is without sufficient information at this time to admit or deny the allegations regarding a systematic overcharge of Indiana drivers . . . ." The filing is the latest development in the lawsuit filed in March. It claims the BMV has "systematically overcharged" Hoosiers for driver's licenses since 2007, collecting tens of millions of dollars more than allowed under state law. BMV spokesman Dennis Rosebrough said the agency had no additional comment because of the pending lawsuit. The class-action complaint seeks a return of the alleged overcharges to drivers statewide. The lawsuit alleges that the BMV charged drivers younger than 75 from $4 to $7 more than Indiana law allows when they obtained or renewed licenses. "There is specific authority for how much they can charge, and what they did instead was, apparently, just made up a number," Mr. Levin said in March. "They just disregarded it." Drivers 75 and older obtain a different type of license, Mr. Levin said, and the suit does not challenge charges for those licenses. Mr. Levin said he did not know how much Hoosiers were overcharged. "The state is going to have to give us that," he said when filing the lawsuit. "But based on our calculations, the number could be as high as $30 (million) or $40 million." Drivers are charged $21 for a six-year license, $19.50 for a five- year license and $18 for a four-year license. The suit says the maximum the BMV is allowed to charge under Indiana law, however, is $15 for a six-year license, $13.50 for a five-year license and $14 for a four-year license. In 2012, the suit alleges, 2.2 million Indiana driver's licenses expired and required renewal. If all those licenses were renewed and drivers were overcharged by the lowest amount alleged in the suit, the BMV would have collected $8.8 million more than allowed by law last year. There are more than 4 million licensed drivers in the state, and many of them were charged "more than they are lawfully required to pay in order to obtain their operator's license," the suit contends. Marion Superior Court Judge Heather Welch has approved the class status in the case. The judge's ruling means she found the single lawsuit, rather than individual cases, a better option for resolving the issue potentially affecting a large number of people. The BMV's new filing also says that any claims under the lawsuit should be barred because the plaintiff failed to comply with provisions of the Indiana Tort Claims Act, and that the statute of limitations for some potential claims has expired. "The BMV does not stipulate or agree to any legal conclusion asserted as an allegation in the complaint," the filing says. "The BMV retains all rights to argue how any law recited in the complaint should be interpreted by the Court." Mr. Levin, the attorney who filed the lawsuit, said he was shocked by the BMV response. "Are you kidding me?" Mr. Levin said in a statement. "Two months of research and investigation and this is what the BMV tells the people it took money from? I'd like to see a list of just 10 people who are in the class and were not 'inadvertently overcharged.' "This case is simple. The BMV admits it can't charge more than the law allows -- but it did. The BMV continues to illegally overcharge Hoosiers. They need to stop immediately and give ordinary citizens back the money they took." JAMAICA PUBLIC: Dec. 9 Hearing Set for Class Action Appeal ---------------------------------------------------------- JamaicaObserver.com reports that the appellate court will on December 9 start hearing the appeals regarding the class-action lawsuit in which the exclusive aspect of the Jamaica Public Service Company (JPS) all-island license was declared invalid in the Supreme Court. The date was set during a case management hearing in the Court of Appeal. The appeal is set for four days. The appeal was set in train after Justice Bryan Sykes ruled in July 2012 that the energy minister does not have the power to grant an exclusive license to the JPS and declared that portion of the 20-year license invalid. The suit was filed by Dennis Meadows, Betty Ann Blaine and businessman Cyrus Rousseau. The claimants had asked for the entire license to be declared invalid on the ground that it was unlawful for one company to be licensed to supply the entire island with electricity. In December the court will hear three appeals -- that of the Government, JPS and the claimants. The claimants filed a cross appeal asking for the court to declare the entire license invalid. KLEYNIMALS LLC: Recalls Stainless Steel Key Toys for Babies ----------------------------------------------------------- Starting date: June 5, 2013 Posting date: June 5, 2013 Type of communication: Consumer Product Recall Subcategory: Toys Source of recall: Health Canada Issue: Product Safety Audience: General Public Identification number: RA-33841 Affected products: Kleynimals stainless steel keys for babies This recall involves the Kleynimals Clean Key Animals toy, which is classified as an infant rattle in Canada. The rattle is made of three stainless steel keys on a stainless steel ring, similar to a set of house keys. There are three animal-themed "keys": an Elephant, a Giraffe and a Lion. Each key is flat and approximately 6 centimetres (2.4 inches) long. The recalled rattles can also be identified by the UPC 853853003007, located on the label on the bag that came with the product. A picture of the recalled products is available at: http://is.gd/KlvjXR Assessment by Health Canada has revealed that the keys do not meet the requirements for the size and shapes of rattles. They are small enough to enter into and become lodged in a young child's throat, posing a choking or suffocation hazard. Neither Health Canada nor Kleynimals, LLC has received any reports of incidents or injuries related to the use of this toy. For some tips to help consumers choose safe toys and to help them keep children safe when they play with toys, see General toy safety tips [http://is.gd/Jgs1xp]. Across Canada, 293 of the recalled rattles sold at various retailers. The recalled rattles were sold from October 2011 to April 2013. The recalled rattles were manufactured in the United States of America. Companies: Manufacturer Kleynimals, LLC Annapolis Maryland UNITED STATES Consumers should take the Kleynimals rattle away from children immediately. For more information on this recall and how to return the rattle for a full refund, consumers may contact Kleynimals, LLC at 1-866- 873-1780. KOHL'S DEP'T STORES: Appeals Court Revives False Ad Class Action ---------------------------------------------------------------- Maura Dolan, writing for Los Angeles Times, reports that California retailers may be liable for large money awards if they falsely advertise that their products are on sale. A federal appeals court on May 21 revived a potential class-action lawsuit alleging that Kohl's Department Stores Inc. misstated in advertising that items had been marked down. The U.S. 9th Circuit Court of Appeals said California consumer laws permit such lawsuits if the customer would not have made the purchase but for the perceived bargain. "Price advertisements matter," Judge Stephen Reinhardt wrote for a three-judge panel. "When a consumer purchases merchandise on the basis of false price information and when the consumer alleges that he would not have made the purchase but for the misrepresentation, he has standing to sue." Kohl's has denied the underlying allegations that its ads were false or misleading. Antonio S. Hinojos filed the lawsuit, alleging he would not have made several purchases at Kohl's had he known the prices did not represent actual markdowns. Mr. Hinojos said he bought Samsonite luggage that was advertised as 50% off its "original" price of $299.99, Chaps Solid Pique polo shirts that were marked down 39% from their "original" price of $36, and other items that were advertised as substantially reduced in price. The lawsuit, intended to be certified as a class action, was dismissed by a lower court. A U.S. District Court judge in Los Angeles had ruled that Mr. Hinojos did not have the right, or standing, to sue because he had not lost money as a result of the alleged false advertising. In overturning that decision, the 9th Circuit relied on a previous California Supreme Court ruling that said consumers lose money if they buy a product only because it was falsely advertised as made in the U.S. An attorney for Kohl's declined to comment. Matthew Zevin, a lawyer for Mr. Hinojos, said the suit also is seeking an order to prevent Kohl's from engaging in the alleged practice in the future. "The law is designed to protect consumers, and the decision will give us our day in court," Mr. Zevin said. "That is all we can ask for, and I think that is appropriate." MAGNUM HUNTER: Finkelstein & Krinsk Files Securities Class Action ----------------------------------------------------------------- Finkelstein & Krinsk LLP on May 22 disclosed that it filed a class action securities lawsuit in the United States District Court for the Southern District of New York on behalf of purchasers of Magnum Hunter Resources Corporation common stock during the period of May 3, 2012 through April 16, 2013, inclusive. Magnum Hunter is an independent oil and gas company. On April 16, 2013, Magnum Hunter disclosed that it had dismissed its auditor, PricewaterhouseCoopers LLP, following it being advised of material weaknesses in the Company's internal accounting controls. PwC identified issues having a material impact on the fairness or reliability of Magnum Hunter's consolidated financial statements. Dissemination of this news to public investors caused Magnum Hunter shares to decline. PwC disagreed with the Company's account of events and has stated that it advised the Company it had concluded that the fairness and reliability of the Company's consolidated financial statements were questionable. Plaintiff seeks to recover damages on behalf of buyers of Magnum Hunter stock during the Class Period. Plaintiff is represented by Finkelstein & Krinsk LLP, the highly regarded and highly experienced law firm specializing in securities cases. As a member of the Class described above, you may (by not later than June 24, 2013) move to serve as lead plaintiff for the Class. If you choose to do nothing you simply remain an absent class member with your sharing in a recovery unaffected by your decision. If you want to discuss this matter or represent your interests at no cost or through your attorney, please contact our San Diego office at 877-493-5366 (Michael Plavi), by fax to 619.238.5425, or via email at cmp@classaction.com FINKELSTEIN & KRINSK, LLP 501 West Broadway, Suite 1250 San Diego, CA 92101 Telephone: 619-238-1333 Fax: 619-238-5425 E-mail: fk@classactionlaw.com MERCK: Judge Allows Propecia Class Action in Canada to Proceed -------------------------------------------------------------- Eric Chaffin, writing for The Legal Examiner, reports that approved by the FDA in 1997, Propecia (finasteride) is prescribed for the treatment of male pattern hair loss. In recent years, however, many men have complained of sexual side effects, including persistent erectile dysfunction that continues even after men stop taking the drug. Now, a Canadian judge has ruled that a class-action lawsuit against drug maker Merck can continue in British Columbia. The lead plaintiff in the case, Michael Miller, claims that after taking the medication, he suffered from lowered libido and erectile dysfunction. He blames Merck for failing to warn of the risks for persistent sexual problems. Men Taking Proscar to Get Finasteride Propecia contains one milligram of finasteride, which is also the active drug in Proscar, a medication prescribed to men with benign prostatic hyperplasia. Though Proscar contains five milligrams of finasteride, some men purchase it and divide it into five pieces for a more economical alternative to buying Propecia. Mr. Miller did just that when he was 25 years old. Following his doctor's instructions, he divided Proscar into five sections and took it to treat his male pattern baldness. He claims that within about a month, he started suffering from sexual side effects, including a diminished sex drive and the inability to maintain an erection. Merck's original label in the U.S. noted that less than two percent of men experienced sexual side effects in the trials preceding the launch of the drug, but that these side effects disappeared upon discontinuation of the medication. They added that for many men, the side effects disappeared as they continued taking the medication. Mr. Miller claims that stopping the medication didn't work for him and that he continues to suffer sexual side effects today. Evidence of Lasting Propecia Side Effects As early as 2008, Merck updated the warnings in Sweden to include the fact that some men had reported persistent sexual side effects after stopping Propecia. But no such warnings were available in the U.S. until 2011. Warning labels in Canada for both Propecia and Proscar noted that "so-called side effects" were "uncommon and do not effect most men," but could include impotence, problems with ejaculation and decreased semen. The labels did not indicate these side effects could be lasting. In November 2012, researchers published a study in the Journal of Sexual Medicine showing that persistent sexual side effects continued to be present in 96 percent of subjects after they had stopped taking the medication. "In most men who developed persistent sexual side effects," the authors wrote, "despite discontinuation of finasteride, the sexual dysfunction continued for many months or years." Mr. Miller claims he stopped taking Proscar in 2009, but does not know when or if his sex drive will return. Lawsuits Continuing In Canada and the U.S. Though certification on the British Columbia class action lawsuit is still pending -- the judge still has to certify that all plaintiffs share a common complaint -- this potential class action may be on its way to trial in Canada. Propecia lawsuits in the U.S. are still limited to individual cases, though federal cases have been consolidated in the Eastern District of New York. State cases have also been centralized in Middlesex County, New Jersey. NORTH SHORE AGENCY: Faces Debt Collection Class Action in Florida ----------------------------------------------------------------- Gordon Gibb, writing for LawyersandSettlements.com, reports that a debt collection agency accused of hounding consumers for repayment of debts not even owed is facing a class-action lawsuit stemming from litigation originally filed May 3, 2007. The allegations contained in the lawsuit are eerily similar to previous complaints archived in the defendant's file with The Better Business Bureau (BBB) of New York. Debt Collection Class Action According to PRNewswire (5/3/13), Casey Joy of Tampa, Florida, filed her action against North Shore Agency Inc., a subsidiary of Outsourcing Solutions Inc. The plaintiff alleges that North Shore attempted to collect debts, together with the issuance of collection letters, with regard to accounts and services the plaintiff did not have, or want. The class-action lawsuit further alleges that North Shore mailed, en masse, threatening debt collection letters through the mail in an attempt to harass and intimidate consumers into paying non- existent debts. This allegation is mirrored in the archived complaint reports of North Shore Agency Inc. by the BBB. While allowing the firm an "A+" rating nonetheless, the BBB file as reflected online states, "Complaints sent to the Better Business Bureau of New York state that a collection agency called North Shore sends consumers collection bill statements regarding money owed to companies that consumers allege they are unaware of. Some consumers' (sic) stated that they received bills regarding subscription Magazines (sic) and books from the collection agency and were told to pay the full amount owed, however, according to consumers they never subscribed to such companies. "Consumers allege that when trying to contact North Shore to resolve the issue, the company states that they owe the money and must pay what's due on the account. According to complaints, this company is falsely accusing consumers of owing money to various companies when in fact the information in their system is incorrect, from name typos to accounts being wrong. "Some consumer's (sic) allege that the company contacts them by phone in an improper manner to explain the balance on their accounts. After consumers get nowhere (sic) with the company, they then contact the BBB to rectify the situation in which the company then corrects the error and cancels consumers' subscriptions." In her class-action lawsuit, plaintiff Casey Joy alleges the collection practices carried out by the defendant are illegal and violate the Federal Fair Debt Collection Practices Act, together with Florida's Consumer Collection Practices Act. According to the PRNewswire report, a common complaint amongst consumers supports the BBB findings and surrounds the receipt of collection letters for unwanted magazine subscriptions that have not been duly initiated. Thus, the money is not legally owed. The lawsuit also states that collection letters fail to notify customers as to the proper avenues to challenge the debt and the collection effort, as required by law. The report notes that the Better Business Bureau of New York identified North Shore as having "a pattern of complaints" and as having failed to correct the underlying causes for such complaints. The class-action lawsuit is Casey Joy, On Behalf of herself and All Others Similarly Situated, vs. North Shore Agency, Inc. Case No. 8:CV-00769-T-17EAJ. ORCHARD ENTERPRISES: Loses Bid to Nix Digital Music Class Action ---------------------------------------------------------------- Eriq Gardner, writing for The Hollywood Reporter, reports that a New York federal judge has declined to dismiss a proposed class action lawsuit against, as he puts it, "the whole of the digital music industry." Norman Blagman is the named plaintiff and seeks to hold liable for copyright infringement several powerhouse companies including Apple, Amazon.com and Google. The defendants in the lawsuit sought to have the lawsuit dismissed for failure to state a plausible claim, but U.S. District Judge Andrew Carter says not so fast. In the lawsuit, Mr. Blagman, the author of three musical compositions, alleges that defendant Orchard Enterprises doesn't require mechanical licenses in distributing audio and video recordings and that the retail defendants haven't ensured that compositions were properly licensed before distribution. In short, the plaintiff claims that the digital music industry is circumventing traditional channels for licensing. The defendants wanted to strike Mr. Blagman's claims as "implausible," but the judge retorts "they reach too far." Although there are tinges of skepticism from the judge about the merits of the claims, the ruling says that Mr. Blagman has hurdled past an issue like standing and should be given a chance to get into the discovery stage. The opinion also serves some comment on another judge's recent decision to deny class certification in a big lawsuit against YouTube. "While it may be true that copyright claims are poor candidates for class-action treatment," writes Judge Carter, citing the YouTube case, "at least in this Circuit, a motion to strike class claims is considered premature if the issues raised are the same ones that would be decided in connection with determining the appropriateness of class certification . . ." PACIFIC FINANCIAL: Faces Class Action Over Broker Trust Breach -------------------------------------------------------------- Sandi Soendker, writing for Land Line, reports that claiming broker trust agreement violations, OOIDA and three plaintiffs filed a class action complaint against Pacific Financial and Federal Service Corp. in the Superior Court of the state of Arizona in January. The complaint asks for declaratory relief, injunctive relief and damages. The named plaintiffs are Thomas and Karen Moore, OOIDA members, doing business as Moore Transportation; Jasmine LLC (owned by OOIDA Member Leslie R. Hines); and K&S Trucking LLC (owned by OOIDA Member Keith McDonald). All hauled loads for a California freight broker known as Alliance Transportation. When Alliance failed to pay, these companies made claims to the broker's trust funds, which were held by Pacific Financial as trustee. To be a broker, the FMCSA requires a federal form for a broker MC# called an OP-1, plus a filing for the broker's agents for service of process. That is called a BOC-3 and lists an address within each state where legal paperwork may be served to the brokerage and then forwarded to the broker. The third requirement is a surety requirement. Transportation brokers must provide $10,000 in security per the FMCSA's current requirement. The security requirement will increase to $75,000 later this year. There are two ways to meet the FMCSA's requirements. One is a surety bond (BMC-84), and the other is a trust agreement (BMC-85). To meet the trust requirement, brokers use the services of corporations like Pacific Financial Association Inc. Pacific Financial claims to be the largest issuer of BMC-85s -- roker trust agreements -- in the country. Under BMC-85 agreements it is the trustee of the funds held as security for the benefit of motor carriers and of shippers doing business with the broker. According to the complaint, in or about the fall of 2011, Alliance stopped paying carriers who had moved freight for it, prompting claims to be made against the trust. However, Alliance -- a non- party in the OOIDA complaint -- continued to contract for shipping services. Sometime in October 2011, the claims in total exceeded the available trust funds. Pacific Financial paid no claims until late May 2012 when it then paid all available funds to two motor carriers. The lawsuit alleges that despite pending claims against the trust, Pacific Financial failed to alert anyone that the Alliance was operating without being "effectively secured," including the trucking companies moving the loads for Alliance. Pacific Financial also failed to take steps to trigger Alliance's duty to replenish the trust and waited several months before serving notice to terminate the trust. On Jan. 23, 2012, a notice of cancellation of the trust was sent by Pacific Financial to FMCSA. This was at least 96 days after Pacific Financial allegedly knew that the aggregation of claims, on a date of delivery basis, exceeded $10,000. The trust was canceled on Feb. 22, 2012. A week later FMCSA revoked Alliance's authority to broker freight. Alliance declared bankruptcy on April 10, 2012. According to OOIDA's complaint, it listed more than 300 unsecured "non priority" debts totaling approximately $1.2 million. About 275 of the unsecured debts were to motor carriers, including the plaintiffs, that Alliance never paid for their services. When Pacific Financial finally did make payment on two of the pending claims on May 24, 2012, it exhausted the trust fund by paying all of one claim and part of a second on a date-of- delivery-basis. All other claimants received nothing. The complaint OOIDA and the named plaintiffs claim that Pacific Financial failed in its job to protect the interests of motor carriers who are the beneficiaries of the broker's trust. Plaintiffs claim it failed to pay trust claims promptly, favored some trust beneficiaries over others, engaged in conflicts of interest, and failed to terminate the trust when claims exceeded available funds. OOIDA is represented in the lawsuit by its Washington, DC, counsel, The Cullen Law Firm. "The gist of the complaint is that Pacific Financial, as a trustee and fiduciary of the broker's trust, was duty-bound to protect motor carriers, the beneficiaries of the trust," said Randall Herrick-Stare, attorney with The Cullen Law Firm. "Consistent with a fiduciary's duty to protect beneficiaries it cannot sit idly by when it has both notice of injury-causing behavior and the capacity to block it. "That means, when Pacific Financial became aware that Alliance was causing damages to trust beneficiaries, it had a duty to act to block its damaging conduct. OOIDA alleges that, by not acting to terminate the Alliance trust -- a condition of its FMCSA license -- and by not promptly paying claims -- thereby triggering a duty to replenish the trust -- Pacific Financial allowed Alliance to continue to operate under the illusion of propriety when it was effectively unsecured." Mr. Herrick-Stare said by not warning motor carriers considering doing business with Alliance that claims Pacific Financial had already received exhausted its security, Pacific Financial left motor carriers in the dark, without information necessary to protect themselves. "The result was exposure of motor carriers to breach of contract damages with no recourse to mandatory security," said Mr. Herrick- Stare. "It is alleged that by being too long passive, Pacific Financial undermined the fundamental purpose of broker security." What do plaintiffs want? OOIDA and the plaintiffs are asking that the civil action be certified as a class action and for an award of compensatory damages to the plaintiffs and the class, plus punitive damages. OOIDA serves as representative for its members and does not seek damages for itself. The proposed class members are approximately 275 motor carriers who contracted with Alliance Transportation, who didn't get paid, and who are listed in the schedules of Alliance's bankruptcy petition. The damages incurred by each class member are the amounts invoiced but not paid during the time Alliance was "effectively unsecured," a time that would have been shorter if Pacific Financial had acted promptly to terminate the trust when claims exceeded $10,000. OOIDA's complaint estimates the total value of the unpaid invoices to be more than $1 million. "Pacific Financial is not registered with either California or Arizona as a trust company but presents itself as being in the trust business," said Mr. Herrick-Stare. "OOIDA's complaint asks for an order declaring that Pacific Financial is in the 'trust business' and asks for an injunction prohibiting Pacific Financial from entering into any more BMC-85 trust agreements until it has successfully registered as a trust company with Arizona and California authorities." Because of the potential conflict of interest, OOIDA also is asking for an injunction prohibiting Pacific Financial from lending to prospective brokers the money to fund their trusts and at the same time serving as the trustee of those same funds. Current status OOIDA and the plaintiffs filed the suit in January in the Superior Court of the State of Arizona, Maricopa County. The defendants removed the case to the Federal District Court predicated on their statement that OOIDA's case was about brokers or carriers, which might pose a federal question. On April 11, OOIDA's attorneys filed a motion to remand the case back to the state court. They argued the case is "not an action against a broker. It is an action against a trustee. For that reason alone, there is no 'inconsistency' between the laws of Arizona governing the fiduciary duties of trustees and any federal laws regarding the duties of brokers." The parties are currently awaiting a ruling from the U.S. District Court for the District of Arizona on the remand issue. RADIENT PHARMACEUTICALS: Jury Trial in Securities Suit in November ------------------------------------------------------------------ The Rosen Law Firm on May 21 announced a significant victory by investors in the Radient Pharmaceuticals Corporation investor class action pending in the U.S. District Court for the Central District of California in Santa Ana. On May 20, 2013 the Court resolved motions for summary judgment filed by defendants Radient, Douglas MacLellan and Akio Ariura. The Court found that there were genuine disputes of material fact as to whether Radient and MacLellan committed securities fraud and denied their motions for summary judgment. The Court granted Mr. Ariura's motion and he is no longer a defendant. This is a significant victory because it means that Court found that based on the evidence there are issues of fact that should be heard by a jury. The jury trial is scheduled to commence on November 12, 2013. The action was originally filed in March 2011 and seeks to recover losses suffered by all purchasers of Radient common stock between January 18, 2011 and March 4, 2011, inclusive. Plaintiffs assert that on January 18, 2011 Radient issued a materially false and misleading press release by falsely touting the prestigious Mayo Clinic's involvement in a clinical trial for Radient's product Onko-Sure. According to the complaint, when the market learned the truth that the Mayo Clinic was not involved in the Onko-Sure clinical trial as Radient represented, the price of Radient common stock declined damaging investors. If you have information pertinent to this action or would like to learn more about these claims, or if you have any questions concerning this announcement or your rights or interests with respect to these matters, please contact: Laurence Rosen, Esq. Phillip Kim, Esq. The Rosen Law Firm P.A. 275 Madison Avenue 34th Floor New York, New York 10016 Telephone: (212) 686-1060 Weekends Telephone: (917) 797-4425 Toll Free: 1-866-767-3653 Fax: (212) 202-3827 E-mail: lrosen@rosenlegal.com pkim@rosenlegal.com Web site: http://www.rosenlegal.com The Rosen Law Firm represents investors throughout the globe, concentrating its practice in securities class actions and shareholder derivative litigation. SCHNUCK MARKETS: Data Breach Class Action Removed to Federal Court ------------------------------------------------------------------ Bethany Krajelis, writing for The Madison St. Clair Record, reports that a St. Clair County class action lawsuit over a security breach to Schnuck Markets' electronic payment systems has been removed to federal court. Schnucks filed a notice to remove the suit that Laverne Rippy brought April 25 in St. Clair County Circuit Court to the U.S. District Court for the Southern District of Illinois. The grocery store chain asserts that the federal court has jurisdiction over the suit because diversity of citizenship between the parties exists, the amount in controversy is more than $5 million and the proposed class exceeds 100 members. Ms. Rippy's lawsuit stems from a well-publicized security breach that may have compromised the credit and debit card information of millions of Schnucks' customers between December 2012 and March 2013. In a timeline previously released to the media, Schnucks said it found out about the issue on March 15, formed a response team on March 19, contacted police on March 20, and began to identify the problem on March 28. It communicated its concerns to the public on March 30. The grocery store chain has said that only card numbers and expiration dates were stolen, not cardholders' names, addresses or anything else. Ms. Rippy claims in her suit that the breach not only compromised her information, but also forced her and other members of the proposed class to spend hours canceling their compromised cards, activating replacement cards and re-establishing automatic withdrawal payment authorizations. The suit, which seeks damages under the Illinois Consumer Fraud and Deceptive Business Practices Act, alleges that Schnucks failed to timely disclose the security breach to its customers, a violation of the Illinois Personal Information Protection Act. Ms. Rippy's suit proposed a class that would include Illinois plaintiffs who shopped at Schnucks' Illinois locations five years preceding the data breach. In the removal notice, Schnucks asserts that the federal court has jurisdiction over the suit because diversity of citizenship exists between the parties as it is a Missouri corporation and Ms. Rippy is an Illinois resident. Schnucks also states in its notice that the suit meets the other requirements for removal under the Class Action Fairness Act in that the size of the proposed class is more than 100 members and the amount in controversy exceeds $5 million. "Schnucks has determined that criminals hacked into its electronic payment systems at 23 stores located in Illinois," the removal notice states. "Schnucks has further determined that approximately 1,600,000 credit or debit card transactions took place at these Illinois stores during the relevant period." An analysis of these transactions, the notice states, showed that about 500,000 unique credit and debit cards were used during the relevant time period and as such, "based on plaintiff's allegations, the proposed putative class has at least 500,000 members." In regards to the amount in controversy, Schnucks asserts that the "Plaintiff and the putative class member's potential 'time and effort' damages alone satisfy the $5 million amount in controversy requirement." Belleville attorney Russell K. Scott represents Schnucks and submitted the removal notice on its behalf. St. Louis attorney Jeffrey A. Millar represents Rippy and the proposed class. Mr. Millar on May 20 filed a motion for leave to file a first amended complaint and a request for admissions. SINO-FOREST CORP: Lerners Discusses Shareholder Litigation ---------------------------------------------------------- Domenico Magisano, Esq., and Jason Squire, Esq. at Lerners report that when public companies are accused of accounting irregularities, class action shareholder litigation often follows. The case of Sino-Forest Corporation is such an example. Weighed down by allegations of accounting irregularities and the class action lawsuits that followed, SFC sought and obtained court protection pursuant to the Companies' Creditors Arrangement Act on March 30, 2012. While the CCAA proceeding stayed the class proceedings as against SFC, there were still many other defendants that remained, including SFC's auditors and underwriters. As the litigation against these other parties proceeded, the question was, who would bear the SFC liability in these class action claims? Would it be: the plaintiffs who would have one fewer defendant to which they could apportion liability; SFC's co-defendants under the concept of joint and several liability; or a combination of both? This was the question before the Ontario Court of Appeal in its first review of the 2009 amendments to the CCAA relating to "equity claims". Litigation History In 2011 it was alleged that SFC had misrepresented its asset holdings and financial position, resulting in an artificial inflation of the share price. Four class proceedings followed, all of which named SFC and some of which named various underwriters and SFC's auditors during the relevant time period (BDO Limited and Ernst & Young LLP). The underwriter and auditor defendants cross-claimed against SFC for contribution and indemnity. In some cases, the contribution and indemnity claims were rooted in the underwriting agreements and audit engagement letters SFC had made representations about its financial condition to its underwriters and auditors, and had given contractual indemnities for their reliance on that information. Other contribution and indemnity claims against SFC were based on traditional common law and Negligence Act claims. After the CCAA Filing, the Superior Court approved a claims procedure. Many of SFC's co-defendants submitted proofs of claim and the Monitor of SFC sought advice and directions from the court regarding whether the co-defendants' contribution and indemnity claims were "equity claims" as defined by the CCAA. Section 6(8) of the CCAA subordinates all equity claims: No compromise or arrangement that provides for the payment of an equity claim is to be sanctioned by the court unless it provides that all claims that are not equity claims are to be paid in full before the equity claim is to be paid. In order to define "equity claim" under the CCAA, one must turn to section 2(1) of the CCAA which states that an equity claim is: a claim that is in respect of an equity interest, including a claim for, among others, a) a dividend or similar payment, b) a return of capital, c) a redemption or retraction obligation, d) a monetary loss resulting from the ownership, purchase or sale of an equity interest or from the rescission, or, in Quebec, the annulment, of a purchase or sale of an equity interest, or e) contribution or indemnity in respect of a claim referred to in any of paragraphs (a) to (d) At first instance, Justice Mowawetz held that the auditors' and underwriters' contribution and indemnity claims against SFC were not general claims, but were "equity claims" under the CCAA. Justice Morawetz held that "it would be totally inconsistent to arrive at a conclusion that would enable either the auditors or the underwriters, through a claim for indemnification, to be treated as creditors when the underlying actions of the shareholders cannot achieve the same status". The Ontario Court of Appeal dismissed the appeal. The Ontario Court of Appeal engaged in a careful statutory interpretation exercise and found that the plain meaning of "equity claim" in the CCAA subordinated the auditors' and underwriters' contribution and indemnity claims below general claims -- that is, the auditors' and underwriters' claims ranked with the claims of shareholders, below the claims of SFC's general unsecured creditors (and particularly SFC's unsecured noteholders). Effect on Shareholder Disputes It is difficult to dispute the court's interpretation of the CCAA provisions in question. However, one must wonder if this outcome is what legislators really intended. The outcome of the decision prevents cross-claimants in a class action suit from having a higher priority to its co-defendant's assets than that available to the plaintiff shareholders; however, the effect is to cause solvent defendants to shoulder a much larger portion of the monetary loss because of the operation of joint and several liability. The auditors and underwriters face potential joint and several liability for representations of a public company, but cannot seek recovery from its insolvent co-defendant. The effect is not abstract -- it cannot be a coincidence that, within a few days of the release of the Court of Appeal's reasons confirming that the auditors and underwriters could not make a general claim on SFC's estate, one auditor announced a tentative settlement with the class of $117 million. Professional auditors and underwriters are obviously key to the operation of capital markets. The risk that those professionals may have to effectively stand as insurers against the insolvency of issuers may increase their fees or cause them to be reticent to provide their services. On the other hand, causing them to bear greater potential risk of misrepresentations that can cause insolvency of issuers may arguably cause auditors and underwriters to heighten their diligence. Perhaps the way to resolve the tension is for Parliament to create a statutory version of a Pierrenger Agreement between the parties where there is a dispute that gives rise to equity claims under the CCAA. Put differently, if a co-defendant in a shareholder dispute obtains CCAA protection, the plaintiff and the remaining defendants would treat the insolvent defendant as having entered into a de facto Pierrenger Agreement, and each liable defendant would be severally, not jointly, liable for each of their proportionate share of liability to the plaintiff. ST. CROIX: Ruling May Have Impact on Environmental Mass Actions --------------------------------------------------------------- According to Thomson Reuters' Alison Frankel, "the doctrine of strict textualism -- in which judicial decisions are compelled solely by statutory language -- has always reminded me of what my father, an internist, used to say about overeager surgeons: When your only tool is a hammer, every problem is a nail. And when your only judicial philosophy is textualism, every case is a matter of words." Simple enough, right? Wrong. Consider a ruling on May 17 by a three-judge panel at the 3rd Circuit Court of Appeals that turned on the definition of "an event or occurrence." The issue for the 3rd Circuit was removal to federal court of a mass action under the Class Action Fairness Act. As you probably recall, Congress passed CAFA in 2005 with the express intention of steering most class actions out of state court and into the federal system. CAFA also mandated that mass actions involving parallel claims by 100 or more individual plaintiffs be litigated in federal court, with a couple of exceptions. One of the exceptions holds that strictly local controversies may remain in state court, even if more than 100 plaintiffs have sued. To meet CAFA's criteria for that exception, cases must assert claims that all "arise from an event or occurrence in the state in which the action was filed, and that allegedly resulted in injuries in that state or in states contiguous to that state." There's not much ambiguity in defining state borders, but what about in delineating the time frame of an event? Was, say, the Civil War a single event or a collection of battles and political actions that each represent a unique event? In the case before the 3rd Circuit, more than 400 current and former residents of St. Croix in the U.S. Virgin Islands claimed to have been injured by St. Croix Renaissance Group's supposed failure to clean up toxic waste piles at a former alumina refinery SCRG purchased in 2002. St. Croix, which is in the business of redeveloping contaminated properties, never operated the refinery and has spent years in cleanup-cost litigation with a former owner of the site and others. But the plaintiffs said in filings in territorial court (the Virgin Islands equivalent of state court) that asbestos and other hazardous chemicals from the abandoned refinery were meanwhile swirling around St. Croix and damaging their health. SCRG removed their suits to federal court as a mass action under CAFA. The plaintiffs moved for remand to the territorial court under the local controversy exception; SCRG's lawyer, Carl Hartmann countered that the plaintiffs' suits didn't involve "an event or occurrence." In December, U.S. District Judge Harvey Bartle of Philadelphia sided with the plaintiffs, finding that 10 years of supposedly continuous contamination can be construed as "an event" for CAFA jurisdictional purposes. "We think that an event, as used in CAFA, encompasses a continuing tort which results in a regular or continuous release of toxic or hazardous chemicals, as allegedly is occurring here, and where there is no superseding occurrence or significant interruption that breaks the chain of causation," Judge Bartle wrote. "A very narrow interpretation of the word 'event' as advocated by SCRG would undermine the intent of Congress to allow the state or territorial courts to adjudicate claims involving truly localized environmental torts with localized injuries." SCRG asked the 3rd Circuit for an expedited review, which was granted. In its appellate brief, the company argued (among other things) that Judge Bartle's definition of an event was at odds with that of the 9th Circuit in Nevada v. Bank of America, which is the only federal appellate ruling on this question. In a brief in response, the plaintiffs' appellate counsel at Public Justice said several district courts have held that ongoing contamination is a single event, and that the legislative history of CAFA shows that Congress included the local controversy exception specifically to permit environmental tort claims to be litigated in state court. The 3rd Circuit panel of Judges Thomas Ambro, Brooks Smith and Michael Chagares said that SCRG's argument wasn't "completely devoid of merit" because Congress chose to use singular forms of "event" and "occurrence" in CAFA's local exception provision. But the panel said that under the ordinary meaning of the words (and without any time limits specified in the statute), an event or occurrence can be a collective set of circumstances, such as continuing contamination. The 3rd Circuit said it didn't even have to consider the legislative history of CAFA to reach that determination. SCRG has already filed a notice of its intention to seek review from the U.S. Supreme Court, which demonstrated its interest in CAFA jurisdictional tussles earlier this year in Standard Fire v. Knowles. SCRG counsel Hartmann told Ms. Frankel in an interview that the company was surprised by the 3rd Circuit's decision because the issue seems to be much more complicated than the appellate opinion suggests, given the 9th Circuit's holding in the Nevada case. Moreover, he said, the ruling could have broad implications in environmental mass actions. "This is going to take all those cases and move them to state court," he said. "It's clear this court wants to push cases out of federal court and into state court. We don't think that's what Congress intended." Public interest groups, however, are cheering the opinion. Leah Nicholls of Public Justice, who argued at the 3rd Circuit for the St. Croix plaintiffs and called the decision "groundbreaking" in a blog post, told me that the 3rd Circuit "quite reasonably said it's not inconsistent to say in this case that continuous and ongoing conduct is a single event or occurrence." According to Ms. Nicholls, the facts here -- which involved the impact of supposedly ongoing contamination at one site -- were quite different from those before the 9th Circuit in the Nevada case, in which a state attorney general brought a wide-ranging parens patriae action involving BofA's alleged deception about mortgage modification and foreclosure practices. "This is local residents suing over a local facility," Ms. Nicholls said. STANDARD FIRE: Mitchell Silberberg Discusses Supreme Court Ruling ----------------------------------------------------------------- Kevin E. Gaut, Esq., and Amr Shabaik, Esq., at Mitchell Silberberg & Knupp LLP report that in Standard Fire Insurance Co. v. Knowles, a unanimous United States Supreme Court held that class action plaintiffs cannot avoid federal jurisdiction under the Class Action Fairness Act ("CAFA") merely by stipulating that total class damages will not exceed $5 million. The decision is a victory for defendants who often prefer that class actions be decided in federal court. Congress enacted CAFA in 2005 to ensure federal jurisdiction for many class actions involving significant amounts in controversy. Subject to certain exceptions, CAFA provides federal jurisdiction over class actions where the class has more than 100 members; the parties are minimally diverse (generally meaning that at least one plaintiff resides in a different state than at least one defendant); and the aggregate amount in controversy for all class members exceeds $5 million. Knowles addressed whether a plaintiff could avoid having his lawsuit removed to federal court pursuant to CAFA merely by stipulating that the class will not seek damages in excess of $5 million. Plaintiff Greg Knowles sought to represent a class consisting of hundreds, and possibly thousands, of persons allegedly denied payments under homeowners insurance policies issued by Standard Fire Insurance Company. Mr. Knowles alleged in his complaint that "Plaintiff and Class stipulate they will seek to recover total aggregate damages of less than five million dollars." Mr. Knowles limited his class to Arkansas residents. The defendant removed the case to federal district court under CAFA. Knowles sought remand, contending that the case did not meet the $5 million CAFA jurisdictional prerequisite. The district court found that the amount in controversy for Mr. Knowles' sizeable class would, absent the stipulation, exceed $5 million. However, it nevertheless held Mr. Knowles' stipulation sufficient to bar federal jurisdiction. The Eighth Circuit refused defendant's appeal, and the Supreme Court granted review. The Supreme Court held the stipulation insufficient to bar CAFA jurisdiction, for two reasons. First, the stipulation was not binding on the class before certification: "[A] plaintiff who files a proposed class action cannot legally bind members of the proposed class before the class is certified." Thus, Mr. Knowles' precertification stipulation bound only Knowles and could not affect the value of the claims of the class Knowles purported to represent. Second, the Supreme Court held that ruling in Mr. Knowles' favor would "exalt form over substance and run directly counter to CAFA's primary objective: ensuring 'Federal court consideration of interstate cases of national importance.'" Such a ruling would conflict with CAFA's purpose by, in effect, "allowing the subdivision of a single $100 million action into 21 just-below $5 million state-court actions simply by including nonbinding stipulations." Knowles confirms the clear terms of the CAFA and closes the loophole Knowles attempted to invoke. The decision helps prevent state-court class action abuses by confirming, as Congress intended, federal jurisdiction for certain large class actions. Q: Does Standard Fire Insurance Co. v. Knowles pose any potential negative drawbacks for employers? A: Overall, the Knowles decision is a significant win for employers as it keeps large class actions in federal court, a forum that is often more favorable for employers. However, plaintiffs now have little incentive to limit their damage claims by committing to a cap on damages to stay out of federal court. Furthermore, the Knowles decision probably will not lead to a sharp decline in class action filings, as plaintiffs may simply file in federal court if their case meets the requirements for federal jurisdiction. US NURSING: Littler Mendelson Discusses Class Action Settlement --------------------------------------------------------------- Barbara A. Gross, Esq., at Littler Mendelson reports that despite the recent trend of successes in decertifying wage and hour class actions in healthcare and other sectors, the number of lawsuits seeking to certify class actions in the healthcare industry continues to grow. As a result, Littler Mendelson also continues to see settlement of these costly and time consuming lawsuits. In one recent case, U.S. Nursing Corp. has agreed to pay $1.77 million to quickly settle claims that it failed to pay the replacement registered nurses that it provided to hospitals during labor strikes for the all-too common claims of wages owed for travel time and automatic meal period deductions. The nurses also claimed that they should have been paid daily, rather than weekly. The settlement was filed for preliminary approval on May 2, 2013, and a hearing to preliminarily approve the settlement is scheduled for June 6, 2013. (Bolton v. U.S. Nursing Corp., N.D. Cal., No. 3:12-cv-04466). In the suit, Shameka Bolton asserts that U.S. Nursing did not pay the replacement nurses for the time they spent traveling from their hotels to the hospitals. Ms. Bolton also asserts a claim that U.S. Nursing was automatically deducting for a 30 minute meal period each day, a claim that is extremely common in many of the suits against healthcare employers. Finally, the suit alleges that under California law, the nurses should have been paid daily, rather than weekly. Interestingly, the settlement was reached quickly after the case was first filed in July 2012 in California state court and then removed to federal court in the Northern District of California in August 2012. By February 2013, the case was referred to private alternative dispute resolution. The settlement comes before any motions for conditional certification under the FLSA or state class certification have been filed. The settlement covers a group of more than 2,500 nurses who were paid by U.S. Nursing to work at various hospitals in Northern and Central California during labor strikes starting in 2008. In addition, the settlement includes a subclass of nearly 500 employees for meal period deduction claims. VENTRUS BIOSCIENCES: Class Action Lead Plaintiff Deadline Nears --------------------------------------------------------------- On May 9, 2013, Scott+Scott, Attorneys at Law, LLP filed the first class action complaint on behalf of those persons and entities who purchased or otherwise acquired Ventrus Biosciences, Inc. securities between December 17, 2010 and June 25, 2012, inclusive. The action, pending in the United States District Court for the Southern District of New York, seeks remedies under the Securities Exchange Act of 1934. If you purchased Ventrus securities during the Class Period and wish to serve as a lead plaintiff in the action, you must move the Court no later than July 8, 2013. Any member of the investor class may move the Court to serve as lead plaintiff through counsel of its choice, or may choose to do nothing and remain an absent class member. If you wish to discuss this action or have questions concerning this notice or your rights, please contact Scott+Scott -- scottlaw@scott-scott.com -- (800) 404-7770, (860) 537-5537) or visit the Scott+Scott website for more information: http://www.scott-scott.com There is no cost or fee to you. Based in New York, New York, Ventrus, a Delaware corporation, is a development stage pharmaceutical company which is focused on late- stage prescription drugs for the treatment of gastrointestinal disorders, specifically hemorrhoids, anal fissures, and fecal incontinence. Ventrus' lead products are topical treatments for hemorrhoids, which target a specific serotonin receptor. The securities class action charges that, throughout the Class Period, the Company made false and/or misleading statements, as well as failed to disclose material adverse facts concerning the Company's lead product iferanserin (VEN 309). The Company described VEN 309 as a new chemical entity for the topical treatment of symptomatic internal hemorrhoids. The Company stated that in seven clinical studies between 1993 and 2003, VEN 309 demonstrated good tolerability and no severe adverse events while showing statistically significant improvements in bleeding, itchiness, and pain. Specifically, during the Class Period, the Company touted that it was in frequent and ongoing communications with the FDA, that clinical end points for the VEN 309 trial had been agreed to by the FDA, and that the prior results from Phase II trials of VEN 309 demonstrated the product's clinical efficacy. The Company represented its prior Phase IIb studies in Germany as evidence of VEN 309's efficacy and as support for its claims that FDA approval would be achieved. These false and misleading statements artificially inflated, maintained, and increased the price of Ventrus' common stock, reaching a high of $20.25 during the Class Period. On June 25, 2012, Ventrus shocked the market when it issued a press release announcing that VEN 309 failed its Phase III trial before the FDA, and that the Company would suddenly abandon further development of VEN 309, including any further attempt to obtain FDA approval. In response to this news, the price of Ventrus common stock plummeted over 50% -- to $5.02 per share on June 25, 2012, resulting in millions of dollars in damages to investors. Scott+Scott has significant experience in prosecuting major securities, antitrust, and employee retirement plan actions throughout the United States. The firm represents pension funds, foundations, individuals, and other entities worldwide. CONTACT: Michael Burnett, Esq. Scott+Scott LLP Telephone: (800) 404-7770 (860) 537-5537 E-mail: scottlaw@scott-scott.com mburnett@scott-scott.com VISA INC: NRF Opts Out of Swipe Class Action Settlement ------------------------------------------------------- Bill Hardekopf, writing for LowCards.com, reports that the National Retail Federation and 19 large retailers, including WalMart, Costco, Gap, Lowe's, Nike and Starbucks are choosing not to participate in the pending $7.2 billion class-action settlement with Visa and MasterCard over interchange fees. These retailers will be forfeiting their share of this monetary settlement. The retailers are opposing the settlement because they feel it won't keep swipe fees from increasing in the future. In addition, if they participate in the settlement, they would be restricted from taking any future legal action for anti-competitive behavior. The proposed agreement was reached in July 2012 when MasterCard, Visa and major banks agreed to pay more than $6 billion to resolve accusations that they engaged in anti-competitive practices and price fixing in payment processing. In addition, credit card companies agreed to reduce swipe fees for eight months, an adjustment valued at $1.2 billion. Retailers had until May 28 to opt out of the proposed settlement. The terms of the proposed settlement says that retailers who do not opt out by the deadline will automatically be considered to accept the settlement. Those who accept the settlement are eligible for a share of the settlement but must give up the right to file future lawsuits over the fees and other restrictive rules. The NRF says this amount is less than three months' worth of swipe fee charges, and the small retailers hit hardest by the fees would give up their rights for as little as a few hundred dollars. "The proposed settlement does nothing to bring swipe fees under control and would give Visa and MasterCard a legal blessing to continue their abuse of merchants and consumers indefinitely," NRF Senior Vice President and General Counsel Mallory Duncan said in a statement. "No settlement at all would be better than this one- sided 'agreement' written by the card companies for the card companies that would tie retailers' hands for decades to come." A hearing on final approval is scheduled for September 12. WAL-MART STORES: Several Retailers Opt Out of Card Fee Settlement ---------------------------------------------------------------- Andrew R. Johnson, writing for The Wall Street Journal, reports that several large retailers, including Wal-Mart Stores Inc., Costco Wholesale Corp. and Starbucks Corp. are opting out of a pending class-action settlement with Visa Inc. and MasterCard Inc., potentially setting the stage for more battles over transaction-processing fees. The merchants say the pending deal, reached last summer, won't stop so-called swipe fees from rising and violates their legal rights by preventing them from bringing legal action against the credit-card networks for alleged anticompetitive behavior in the future. "If this settlement is approved, it would allow credit-card companies and big banks to perpetuate an unfair and broken system that costs all consumers, including those who don't even have a credit or debit card," Mike Cook, senior vice president of finance and assistant treasurer for Wal-Mart, said on May 21. The 19 companies, which also include Gap Inc., Lowe's Cos., Nike Inc., 7-Eleven Inc. and Alon Brands Inc., said they are objecting to and opting out of the settlement. They also are considering "additional legal action to recover damages from Visa and MasterCard under U.S. antitrust laws," according to a statement from the group. By opting out, the retailers forfeit their right to monetary payments set to go to merchants that accept Visa and MasterCard credit cards. Separately, the National Retail Federation, a Washington, D.C.- based trade group, said on May 21 it also plans to object to and opt out of the settlement. The move comes a week before a court deadline to object to and opt out of the deal, which was announced last July. Judge John Gleeson of U.S. District Court in Brooklyn granted preliminary approval to the settlement in November, and a hearing on final approval is scheduled for Sept. 12. A MasterCard spokesman said on May 21 the company was confident the court would grant final approval to the settlement. A spokesman for Visa declined to comment. Supporters of the deal have previously argued its critics have misconstrued the terms of the settlement in an effort to drum up support for legislation that could permanently limit credit-card swipe fees. Wal-Mart and other retailers in 2010 successfully lobbied for federal legislation known as the Durbin amendment, which cut in half the amount of fees merchants pay to accept debit cards. The provision did not affect credit-card swipe fees. Trish Wexler, a spokeswoman for the Electronic Payments Coalition, which represents Visa, MasterCard and large banks, said on May 21 the complaints made by Wal-Mart and the other merchants were already raised during the course of the litigation. "Had these arguments had any merit or strength, they would have been included in the final settlement," Ms. Wexler said. "We remain fully confident that this will have no material impact on the settlement's final approval in the fall." If approved, the settlement would deliver up to $6.05 billion to as many as eight million merchants who accept Visa and MasterCard credit cards. The defendants have also agreed to temporarily lower swipe fees, also known as interchange rates, by an amount equal to $1.2 billion. Some changes have already been made as a result of the settlement. For example, Visa and MasterCard in January eliminated rules that previously prohibited merchants from tacking on an extra fee to customers who pay with a credit card. The deal is intended to put to rest litigation filed against Visa, MasterCard and several large banks that issue the payment networks' credit cards, including Bank of America Corp., J.P. Morgan Chase & Co. and Capital One Financial Corp. The suits, filed by merchants and trade groups, alleged that the defendants conspired to set transaction fees -- which retailers pay each time a customer pays with a credit card -- at arbitrarily high levels. The fees are set by Visa and MasterCard and collected by the banks that issue their cards as revenue. But the settlement has drawn heated opposition from several trade groups, including named plaintiffs in the suits, as well as some large merchants. The opponents, who want to derail the deal, argue the amount being paid is a drop in the bucket compared with the amount of interchange fees they've paid over the years. They also argue that the deal strips them of their right to due process by not allowing them to opt out of the rule changes, which apply to all merchants regardless of whether they opt out of the settlement. Craig Wildfang, an attorney with Robins, Kaplan, Miller & Ciresi LLP, which is representing the class of merchants in the case and helped negotiate the settlement, said he didn't expect that the retailers' announcement on May 21 would affect the judge's analysis of the settlement. "The class is not surprised by the announcement [Tues]day by these 19 merchants," Mr. Wildfang said. "All of them have been vocal in their expressing their dissatisfaction with the settlement for reasons that we disagree with." YELP: Small Claims Court Ruling in Advertising Suit Appealed ------------------------------------------------------------ Tom Gara, writing for The Wall Street Journal, reports that in San Diego this April, a $2,700 judgment was made against Yelp, and there was also a re-airing of allegations -- rejected by a U.S. District judge in late 2011 -- that businesses are pressured to advertise with Yelp at the threat of lowered visibility on its site. Yelp fought -- and won -- a potential class action lawsuit over similar claims beginning in 2010. According to a transcript of the hearing, their re-emergence in a San Diego court in April was followed by the judge describing Yelp's advertising contract as "the modern-day version of the mafia going to stores and saying, "You wanna not be bothered?" The case will be taken to a higher court on appeal. The McMillan Law Group, which brought the claim against Yelp, agreed to an advertising deal with the site after it had become "a good source of new clients for us," said attorney Julian McMillan, representing his firm in the court. The deal involved the firm paying Yelp $540 per month in return for 1,200 ad impressions per month on the site. An impression is counted each time an ad is displayed to a user. Mr. McMillan claimed Yelp did not deliver the 1,200 monthly impressions, leading to his firm cancelling the contract and asking for its money back. The site's representative in the court, Bradley Bohensky, said the claim was based on a misunderstanding of how such impressions are measured, and that Yelp in fact "over delivered" on the ad impressions promised. On top of the dispute over ad impressions, Mr. McMillan raised the allegation -- not part of his claim against Yelp -- that after cancelling the advertising contract with the company, the visibility of his business and its positive reviews declined on the site. That claim has been raised against the company many times in the past, and was declared a "typical Yelp conspiracy theory" by the site's CEO, Jeremy Stoppleman, in a 2010 response to such allegations. But Mr. McMillan told the Wall Street Journal on May 21 that he plans on filing a separate complaint against the company over the allegation. In the end, much of the judgment in the San Diego court rested on the judge's decision that Yelp's contract with the law firm -- a standard agreement it makes with advertisers -- was a "contract of adhesion", a legal term for a contract that heavily favors one party over the other and whose terms are not freely negotiated between the two. The terms of the contract, Judge Doft said, were "unfair and one sided." "Every single bit of settled law is twisted around by this contract," the judge said. "Everything is twisted around." Vince Sollitto, Yelp's Vice President of Corporate Communications, told the WSJ on May 21 the judgment of the small-claims court was "completely at odds and atypical with other rulings." The plaintiff, he said, "misstated the facts repeatedly to the judge, who in turn appeared to ignore both the actual facts in front of him and the applicable law." An appeal against the judgment will take place in "a more experienced court where lawyers from both sides can argue facts not opinion, and expect a ruling based on actual facts," he added. In the hearing, Judge Doft declined a request by Mr. McMillan for a written ruling, saying his court was too busy for the "luxury of writing out decisions." And decisions like his, he said, won't make "a bucket of spit's difference in what happens" in the appeal of the case, because appeals against small claims court rulings do not consider the previous hearings and are considered new trials. But Mr. McMillan relishes the prospect of a new trial, which may help drive business to his bankruptcy law firm. In a recent blog post addressing other small businesses that may have disputes with Yelp, he hailed his "massive victory" against the site. "We can help you get your hard earned money back," he wrote, adding, for good measure, his phone number for those who may wish to call and discuss their complaints. * Product Liability Class Action Resurgence Expected in Australia ----------------------------------------------------------------- Moira Saville, Esq., Mandi Jacobson, Esq., and Katrina Geddes, Esq. at King & Wood Mallesons report that a resurgence in product liability class actions has been predicted in Australia since May 2012. Since then, new class actions have been filed in relation to Bonsoy soy milk, dopamine agonists, transvaginal mesh, hip implants and knee implants, among others. Some of these follow similar actions taken overseas, such as proceedings brought against DePuy in relation to its hip implants in the United States and against the manufacturers of dopamine agonists in multiple countries. In line with this trend, two product liability class actions have recently been settled in Australia -- a class action concerning faulty knee implants manufactured by DePuy and a case brought against Merck in relation to its VIOXX arthritis drug (although the latter still requires court approval under Section 33V of the Federal Court of Australia Act 1976 (Cth)). DePuy Knee Implant Class Action In December 2012 DePuy reached a settlement for a class action concerning faulty knee implants distributed in Australia. The proceedings brought against DePuy and Johnson & Johnson alleged that: -- the implants were not reasonably fit for the purpose for which they were supplied, within the meaning of Section 74B of the Trade Practices Act 1974 (Cth); -- the implants were not of merchantable quality, as required by Section 74D of the act; and -- DePuy was negligent in manufacturing the implants. The settlement was approved by Justice Buchanan of the Federal Court on December 4 2012. It was discovered that some of DePuy's knee implants contained alumina particles that wore down articulating surfaces of the knee to a greater extent than the superficial wear ordinarily observed in well-functioning knee prostheses. Where it occurred, this situation reflected what the lead applicant, Pamela Casey, submitted was a "superadded risk of failure" of the implants. The implants were recalled in Australia in late July 2009, seven months after the lead applicant had already been fitted with an implant, requiring further surgery. The parties negotiated two protocols to settle the class action: -- the compensation protocol; and -- the liability protocol, which required the establishment of an expert panel of surgeons to act as assessors. It was agreed that claims for compensation should be assessed by reference to criteria set out in the liability protocol, the overarching criterion being that compensation would be paid "if it is more likely than not that alumina particles from an Affected Implant caused Abnormal Wear (the Characteristic)". 'Abnormal wear' of the articulating surfaces in the knee was defined as that which exceeded "wear that would generally be expected in a total knee replacement prosthesis that had been implanted for a comparable period of time". As part of the settlement, compensation to eligible group members for non-economic loss and gratuitous care was to be awarded in accordance with four categories: -- Group members who underwent one corrective procedure consequent on the affected implant, but required no further surgery, would be awarded A$30,000 in compensation; -- Group members who had undergone one revision plus one other surgical procedure consequent on the affected implant would be awarded A$40,000; -- Group members who had undergone one revision plus two or three other surgical procedures consequent on the affected implant would be awarded A$65,000; and -- Group members who had undergone one revision plus four or more other surgical procedures consequent on the affected implant would be individually assessed. Discounts to compensation were also to be applied in the case of bilateral revision surgery as, among other things, the overall recovery period would likely be less than if a group member had undergone separate revision surgeries. Additionally, the compensation protocol provided for compensation to be paid to the estates of deceased group members. Compensation payable for financial losses, including out-of-pocket expenses and economic loss, was to be assessed under Part VIB of the Trade Practices Act.(6) Justice Buchanan agreed with expert legal opinion that the settlement: "represents an appropriate balancing of the interests of the group members who will be entitled to compensation against the prospects for achieving a litigated outcome, and the risks involved in failure of such litigation." In particular, he praised the protection afforded to group members who wished to take action against the respondents but were assessed as ineligible for compensation under the liability protocol as they did not exhibit 'abnormal wear'. For group members lacking this characteristic, the settlement as originally proposed would have extinguished their rights against the respondents. However, the final amended settlement agreement preserved their right to commence, continue or take any action, claim or proceeding against the respondents for "any other alleged mechanism of failure" falling outside the defined characteristic. Justice Buchanan noted that these changes were "important ones which address the rights of group members who will not be entitled to a payment under the compensation protocol". Delivering his final approval, Justice Buchanan noted that "[t]here have been very few complaints among the more than 430 inquiries received regarding the proposed settlement". He did not believe that the few objections that had arisen provided a reason not to approve the settlement. Guided by the evidence, the submissions supporting settlement and the parties' positive response to judicial concerns, he concluded that the settlement should be approved. VIOXX Class Action It has recently been reported that drug company Merck Sharp & Dohme (Australia) Pty Ltd has reached an A$540,000 settlement with Australians who claim that Merck's arthritis drug, VIOXX, gave them heart problems. If approved by Justice Jessup of the Federal Court of Australia, the settlement will result in eligible group members (ie, those who suffered a heart attack after consuming VIOXX for a certain period) each receiving a maximum of A$2,000 in compensation (A$1,500 if deceased). This ruling would end the long-running class action against the pharmaceutical company that began in December 2005 and continued in May 2012, when the High Court refused special leave to appeal the 2010 decision of the Full Court of the Federal Court of Australia overturning a damages award in respect of the representative applicant in the action. Justice Jessup expressed concern that an order approving the settlement would be binding on any group members who did not meet the eligibility criteria for compensation, notwithstanding that Section 33ZB of the Federal Court of Australia Act offers protection for group members by allowing them to opt out. He also expressed concern that the proposed settlement did not take into account individual circumstances, in particular those of group members who may have a stronger case against Merck on causation: "I must say that I'm having difficulty coming to grips with why the settlement should be regarded as fair and reasonable in the interests of all group members . . . without any attempt to make a distinction between those who would be more likely to establish causation." Justice Jessup has therefore reserved his decision. * IDTIS Issues Alert on Medical Class Action Scam -------------------------------------------------- Linda Foley, writing for Examiner, reports that the ID Theft Info Source (IDTIS) released an alert on May 21 regarding two scams that the public needs to be aware of and are of "immediate threat." The first is a scam that starts with a phone call and person that says they are calling regarding a class action lawsuit. They ask if you or a loved one has had pelvic mesh surgery or taken birth control medication. If you say know they ask about other types of surgeries that we all have seen on television. Jay Foley of the IDTIS who has spoken to people who got one of these calls said, "It is clear that the person is speaking with an accent and due to the voices in the background is part of a call center. The man asks if you or anyone in your family ever had a pelvic mesh implanted or ever took birth control medication. When told no then goes on to ask about other implants and medications that have been widely advertised. The problem is that they then ask for information such as your name, address, and Social Security number to add you to the class action suit. That is exactly the same information that is needed for identity theft." Mr. Foley then talked about the questions someone should ask interested in a class action suit such as the name of the law firm, where the firm is located and most importantly "how did they get your phone number" due to the number of data breaches involving medical records. He said that anyone interested in a class action suit should research different firms online rather than providing information to the caller. C all state bar associations to verify the legitimacy of the law firm and ask questions about the suit itself. The second scam alert has to do with the Oklahoma tornados and those sweeping through tornado alley. "Before the winds in Oklahoma even stopped blowing thieves were already putting programs into action to cheat people out of money," Mr. Foley said. "Unfortunately this is a pattern that has been seen for years and as recently as the Boston bombing. They pose as charities, buy or take over websites that are similar to legitimate charities and may even go door to door asking for money." ********* 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 * * *