/raid1/www/Hosts/bankrupt/CAR_Public/130801.mbx
C L A S S A C T I O N R E P O R T E R
Thursday, August 1, 2013, Vol. 15, No. 150
Headlines
AGROPUR: Recalls Igor Brand Gorgonzola Cheese
ALLY FINANCIAL: Awaits Ruling in N.J. Carpenters Suit vs. Units
AMERICAN GREETINGS: Sept. 20 Hearing on Baker/Collier Suit Deal
AMERICAN GREETINGS: Bids to Dismiss Shareholder Suit Pending
AMERICAN GREETINGS: Seeks Dismissal of "Wolfe Action II" in Ohio
AMERICAN GREETINGS: Appeals in "Wolfe" & LMPERS Suits Abandoned
AMERICAN ORIENTAL: Still Awaits Ruling on Bid to Junk Class Suit
BAYER HEALTHCARE: Faces Suit in Texas Over Mirena System
BERNARD MADOFF: Nears Settlement With Investors in Ponzi Scheme
BORGATA CASINO: Obtains Favorable Ruling in Sex Bias Suit
CALIFORNIA: Dismissal of Inmate's Claim in "Pride" Suit Reversed
CARMAX INC: Awaits Ruling on Petition for Review in "Fowler" Suit
CELLCO PARTNERSHIP: Did Not Pay OT and Minimum Wages, Suit Says
CHEMROY CANADA: Recalls Sensory Effects Brand Maple NF RT
CIGNA CORPORATION: Loses Judgment Bid in "Executive Risk" Case
CLEAVER BROOKS: Weitz & Luxenberg Gets $190MM Asbestos Verdict
CLIC INTERNATIONAL: Recalls Clic & Al Nakhil Sesame Paste Tahina
DEUTSCHE BANK: 2nd Cir. Affirms Dismissal of "Adams" Class Action
DR. REDDY'S: Trial in Nexium-Related Suits Set for February 2014
DYNAVAX TECHNOLOGIES: August 19 Lead Plaintiff Deadline Set
EXXON MOBIL: Appeals Court Affirms $105MM Judgment in MTBE Suit
FACEBOOK INC: Beacon Program Class Action Settlement Challenged
FAMILY DOLLAR: Awaits Appellate Ruling in Gender Bias Action
FAMILY DOLLAR: Continues to Defend Wage and Hour Class Suits
FAMILY DOLLAR: "Pipefitters" Suit Voluntarily Dismissed in June
FAMILY MANAGEMENT: 2nd Cir. Affirms Judgment in "Newman" Suit
FRESNO RETIREMENT BOARD: Judgment in "Chisom" Suit Upheld
GENERAL MOTORS: Recalls 68 Sierra and Silverado Models
GEORGIA-PACIFIC CONSUMER: Appeals Ct. Upholds Class Certification
GLAXOSMITHKLINE PLC: Settles U.S. Avandia Suits for $229 Million
JEFFERIES GROUP: Del. Merger-Related Suits Go On; NY Suits Stayed
KB HOME: Continues to Defend Remaining Suit Over Chinese Drywall
KOHL'S CORP: Faces Securities Suit Over Misstated Financials
LENNAR CORP: To Resolve Drywall Claims for 60 Homes in MDL Deal
LOS ALTOS APARTMENTS: Class Cert. Denial in Tenants' Suit Upheld
MAGNUM HUNTER: Defends Securities Suits in New York and Texas
MARRIOTT HOTEL: Hawaii S.C. Answers Question on "Tipping" Issue
MIRA HEALTH: FDA Warns Customers About Steroids in Supplement
NEXANS CANADA: Recalls 102 14/2 NMD90 Heatex Cable
NEW YORK: Andrew Cuomo Sued by 3 Residents of Impacted Adult Homes
NISSAN MOTOR: Recalls 3,509 Versa Note Model Cars
NONG SHIM: Accused of Fixing Ramen Noodle Prices for a Decade
NORTH AMERICAN TITLE: 3rd Cir. Remands "Tubbs" Suit to Dist. Ct.
OIL PRODUCERS: Loses Appeal From Ruling in "Fawcett" Suit
PROSHARES TRUST: 2nd Cir. Upholds Securities Litigation Dismissal
S.A.C. CAPITAL: Indicted for Insider Trading Offenses in New York
SCBT FINANCIAL: S.C. Denies Motion to Dismiss Stockholders' Suit
SEARS ROEBUCK: Order Denying Arbitration in "Bovay" Suit Upheld
SECURITAS SECURITY: Fails to Pay OT and Minimum Wages, Suit Says
SERVICE CORPORATION: 9th Cir. Flips Order Denying of Arbitration
SHARP HEALTHCARE: Class Cert. Denial in Wage and Hour Suit Upheld
THREE GENERATIONS: "Stecko" Suit to Proceed as Class Action
TRIUMPH: Recalls 237 Daytona and Street Triple Model Motorcycles
UNITED TELEPHONE: Ohio High Court Decertifies Customers' Suit
WHIRLPOOL CORP: 6th Cir. Affirms Liability Class Certification
WHIRLPOOL CORP: Katten Muchin Discusses Sixth Circuit Ruling
ZIPCAR INC: 1st Circuit Affirms Dismissal of "Reed" Case
* Baby Activity Centers Among Recalled Products
* Class Actions Target Tourism & Hospitality Industry in Canada
* FDA Proposes New Steps to Ensure Safety of Imported Foods
*********
AGROPUR: Recalls Igor Brand Gorgonzola Cheese
---------------------------------------------
Starting date: July 30, 2013
Type of communication: Recall
Alert sub-type: Updated Health Hazard Alert
Subcategory: Microbiological - Listeria
Hazard classification: Class 1
Source of recall: Canadian Food Inspection
Agency
Recalling firm: Agropur
Distribution: Alberta, Ontario, Quebec,
New Brunswick, May be
National
Extent of the product distribution: Retail
Affected products: Igor Gorgonzola Igorcreme DOP 1/8, 1.5 kg., UPC
2190010 014222.
The Canadian Food Inspection Agency (CFIA) and Agropur are warning
the public not to consume the Igor brand Gorgonzola Cheese because
the product may be contaminated with Listeria monocytogenes.
Also affected by this alert is the above product which may have
been sold in smaller packages, cut and wrapped by some retailers.
Consumers are advised to contact the retailer to determine if they
have the affected product. Pictures of the recalled products are
available at: http://is.gd/5c4Vn4
The product was distributed in Quebec, Ontario, Alberta and New
Brunswick. However, it may have been distributed in other
provinces.
There have been no reported illnesses associated with the
consumption of this product.
The importer, Agropur, St-Hubert, Quebec, is voluntarily recalling
the affected product from the marketplace. The CFIA is monitoring
the effectiveness of the recall.
All lot codes and Best Before dates of the following Igor brand
Gorgonzola cheese, product of Italy, are affected by this alert.
* * *
Food contaminated with Listeria monocytogenes may not look or
smell spoiled. Consumption of food contaminated with these
bacteria may cause listeriosis, a foodborne illness. Listeriosis
can cause high fever, severe headache, neck stiffness and nausea.
Pregnant women, the elderly and people with weakened immune
systems are particularly at risk. Infected pregnant women may
experience only a mild, flu-like illness, however, infections
during pregnancy can lead to premature delivery, infection of the
newborn, or even stillbirth.
For more information, consumers and industry can contact:
Agropur Cheese and Ingredients Division
Fine Cheese Business Unit
Customer service: 1-450-443-4838 or 1-800-668-0806; or
CFIA by filling out the online feedback form at
http://www.inspection.gc.ca/contactus
ALLY FINANCIAL: Awaits Ruling in N.J. Carpenters Suit vs. Units
---------------------------------------------------------------
Ally Financial Inc. is awaiting a court decision on a motion for
reconsideration in a class action lawsuit involving its
subsidiaries, according to the Company's July 9, 2013, Form 8-K
filing with the U.S. Securities and Exchange Commission.
On January 3, 2011, New Jersey Carpenters Health Fund, New Jersey
Carpenters Vacation Fund, and Boilermaker Blacksmith National
Pension Trust, on behalf of themselves and a putative class
(collectively, New Jersey Carpenters), filed a Consolidated Second
Amended Securities Class Action Complaint against numerous
defendants including Ally Securities LLC, and a number of
Residential Capital, LLC entities and individual directors and
officers. The complaint alleges that the plaintiffs and the class
purchased mortgage-backed securities (MBS) between June 28, 2006,
and May 30, 2007, and asserts that the offering documents
associated with these transactions contained misrepresentations
and omitted material information in violation of the federal
securities laws. The complaint seeks compensatory damages,
rescission or a rescissory measure of damages, and attorneys' fees
and costs, among other relief. New Jersey Carpenters moved for
class certification. The court denied the plaintiffs' motion for
class certification, and the Plaintiffs appealed and 2nd Circuit
affirmed the District Court's ruling. The Plaintiffs were then
allowed limited discovery to re-attempt class certification and
the District Court certified a modified class and allowed claims
to be reinstated by certain intervenors. The defendants have
filed a motion for reconsideration of class certification.
Ally Financial Inc., formerly known as GMAC Inc., is an
independent, diversified, financial services firm. Founded in
1919, the Company is an automotive financial services company with
over 90 years experience providing a broad array of financial
products and services to automotive dealers and their customers.
The Company became a bank holding company in 2008. The Company's
indirect wholly owned banking subsidiary, Ally Bank, is a leading
franchise in the growing direct (Internet, telephone, mobile, and
mail) banking market.
AMERICAN GREETINGS: Sept. 20 Hearing on Baker/Collier Suit Deal
---------------------------------------------------------------
Hearing on the final approval of American Greetings Corporation's
settlement of the Baker/Collier Litigation is scheduled for
September 20, 2013, according to the Company's July 10, 2013, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended May 31, 2013.
American Greetings Corporation is a defendant in two putative
class action lawsuits involving corporate-owned life insurance
policies (the "Insurance Policies"): one filed in the Northern
District of Ohio on January 11, 2012, by Theresa Baker as the
personal representative of the estate of Richard Charles Wolfe
(the "Baker Litigation"); and the other filed in the Northern
District of Oklahoma on October 1, 2010, by Keith Collier as the
personal representative of the estate of Ruthie Collier (the
"Collier Litigation").
In the Baker Litigation, the plaintiff claims that American
Greetings Corporation (1) misappropriated its employees' names and
identities to benefit itself; (2) breached its fiduciary duty by
using its employees' identities and personal information to
benefit itself; (3) unjustly enriched itself through the receipt
of corporate-owned life insurance policy benefits, interest and
investment returns; and (4) improperly received insurance policy
benefits for the insurable interest in Mr. Wolfe's life. The
plaintiff seeks damages in the amount of all pecuniary benefits
associated with the subject Insurance Policies, including
investment returns, interest and life insurance policy benefits
that American Greetings Corporation received from the deaths of
the former employees whose estates form the putative class.
In the Collier Litigation, the plaintiff claims that American
Greetings Corporation did not have an insurable interest when it
obtained the subject Insurance Policies and wrongfully received
the benefits from those policies. The plaintiff seeks damages in
the amount of policy benefits received by American Greetings
Corporation from the subject Insurance Policies, as well as
attorney's fees, costs and interest. On April 2, 2012, the
plaintiff filed its First Amended Complaint, adding
misappropriation of employee information and breach of fiduciary
duty claims as well as seeking punitive damages. On April 20,
2012, American Greetings Corporation moved to transfer the Collier
Litigation to the Northern District of Ohio, where the Baker
Litigation is pending. On July 6, 2012, the Court granted
American Greetings Corporation's Motion to Transfer and
transferred the case to the Northern District of Ohio, where the
Baker Litigation is pending.
On May 22, 2013, the Court preliminarily approved a full and final
settlement of all the claims of the Wolfe and Collier estates, as
well as the classes they seek to represent. As a result of the
preliminary approval, the Court consolidated the two cases and
certified a single class that consists of the heirs or estates of
the estates and heirs of all former American Greetings Corporation
employees (i) who are deceased; (ii) who were not officers or
directors of American Greetings; (iii) who were insured under one
of the following corporate-owned life insurance plans: Provident
Life & Accident 61153, Provident Life & Accident 61159, Mutual
Benefit Life Insurance Company 111, Connecticut General ENX219,
and Hartford Life Insurance Company 361; and (iv) for whom
American Greetings has received a death benefit on or before the
date on which the Court enters the Order of Preliminary Approval.
Required notices to potential class members and to state attorneys
general as required under the Class Action Fairness Act of 2005
were mailed on May 30, 2013.
The Court will entertain final approval of the settlement on
September 20, 2013.
If the settlement is finally approved by the Court, American
Greetings Corporation will deposit $12.5 million into a settlement
fund to be distributed in its entirety to those members of the
class, who present valid claims, their counsel, and a settlement
administration vendor. This amount was accrued prior to the first
quarter of 2014.
Management is unable to estimate a range of reasonably possible
losses for these cases in which the damages have not been
specified and (i) the proceedings are in the early stages, (ii)
there is uncertainty as to the outcome of the pending appeals or
motions, and/or (iii) there are significant factual issues to be
resolved. However, for these cases, management does not believe,
based on currently available information, that the outcomes of
these proceedings will have a material adverse effect on the
Corporation's financial condition, though the outcomes could be
material to the Corporation's operating results for any particular
period, depending, in part, upon the operating results for such
period.
Founded in 1906 and based in Cleveland, Ohio, American Greetings
Corporation -- http://www.americangreetings.com/-- operates
predominantly in a single industry: the design, manufacture and
sale of everyday and seasonal greeting cards and other social
expression products. The Company manufactures or sells greeting
cards, gift packaging, party goods, stationery and giftware in
North America, primarily in the United States and Canada, and
throughout the world, primarily in the United Kingdom, Australia
and New Zealand. The Company's subsidiary, AG Interactive, Inc.,
distributes social expression products, including electronic
greetings and a broad range of graphics and digital services and
products, through a variety of electronic channels, including Web
sites, Internet portals and electronic mobile devices. The
Company also engages in design and character licensing and
manufactures custom display fixtures for its products and products
of others.
AMERICAN GREETINGS: Bids to Dismiss Shareholder Suit Pending
------------------------------------------------------------
American Greetings Corporation and other defendants' motions to
dismiss a consolidated shareholder lawsuit remain pending,
according to the Company's July 10, 2013, Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
May 31, 2013.
On September 26, 2012, the Corporation announced that its Board of
Directors received a non-binding proposal from Zev Weiss, the
Corporation's Chief Executive Officer, and Jeffrey Weiss, the
Corporation's President and Chief Operating Officer, on behalf of
themselves and certain other members of the Weiss family and
related parties to acquire all of the outstanding Class A common
shares and Class B common shares of the Corporation not currently
owned by them (the "Going Private Proposal").
On March 29, 2013, the Corporation signed an agreement and plan of
merger (as amended on July 3, 2013, the "Merger Agreement") by and
among American Greetings Corporation, Century Intermediate Holding
Company ("Parent"), which upon the closing of the Merger will be
indirectly owned by the Family Shareholders, and Century Merger
Company, a wholly-owned subsidiary of Parent ("Merger Sub"). At
the effective time of the Merger, each issued and outstanding
share of the Corporation (other than shares owned by the
Corporation, Parent (which will include at the effective time of
the Merger all shares currently held by the Family Shareholders),
Merger Sub or holders who have properly exercised dissenters'
rights under Ohio law) will be converted into the right to receive
$19.00 per share, in cash, without interest and subject to any
withholding taxes, and Merger Sub will merge with and into the
Corporation, with the Corporation surviving the Merger as a
wholly-owned subsidiary of Parent (the "Merger"). Under the
Merger Agreement, "Family Shareholders" includes: Zev Weiss, a
director and the Corporation's Chief Executive Officer; Morry
Weiss, the Corporation's Chairman of the Board of Directors;
Jeffrey Weiss, a director and the Corporation's President and
Chief Operating Officer; and certain other members of the Weiss
family, together with the Irving I. Stone Limited Liability
Company.
On September 27, 2012, Dolores Carter, a purported shareholder,
filed a putative shareholder derivative and class action lawsuit
(the "Carter Action") in the Court of Common Pleas in Cuyahoga
County, Ohio (the "Cuyahoga County Court"), against American
Greetings Corporation and all of the members of the Board of
Directors ("Carter Defendants"). The Carter Action alleges, among
other things, that the directors of the Corporation breached their
fiduciary duties owed to shareholders in evaluating and pursuing
the proposal. The Carter Action further alleges claims for aiding
and abetting breaches of fiduciary duty. Among other things, the
Carter Action seeks declaratory relief. Subsequently, six more
lawsuits were filed in the Cuyahoga County Court purporting to
advance substantially similar claims on behalf of American
Greetings against the members of the Board of Directors and, in
certain cases, additional direct claims against American
Greetings. One lawsuit was voluntarily dismissed. The other
lawsuits, which remain pending, were consolidated by Judge Richard
J. McMonagle on December 6, 2012 (amended order dated December 18,
2012), as In re American Greetings Corp. Shareholder Litigation,
Lead Case No. CV 12 792421. The Lead plaintiffs and lead
plaintiffs' counsel also were appointed.
On April 30, 2013, the lead plaintiffs' counsel filed a
Consolidated Class Action Complaint. The Consolidated Complaint
brings a single class claim against the members of the
Corporation's Board of Directors for alleged breaches of fiduciary
duty and aiding and abetting. The plaintiffs allege that the
preliminary proxy statement on Schedule 14A filed with the
Securities and Exchange Commission ("SEC") on April 17, 2013,
omits information necessary to permit the Corporation's
shareholders to determine if the Merger is in their best interest,
that the controlling shareholders have abused their control of the
Corporation, that the special committee appointed to oversee the
transaction is not independent, and that the other members of the
Board of Directors are also not independent. On June 13, 2013,
the defendants filed motions to dismiss the Consolidated Class
Action Complaint based on plaintiffs' failure to properly plead
their claims as derivative actions, exercise their statutory
appraisal rights as the sole remedy for dissatisfaction with the
proposed share price, and to overcome the business judgment rule
with respect to their breach of fiduciary duty claims. The
motions remain pending.
Management is unable to estimate a range of reasonably possible
losses for these cases in which the damages have not been
specified and (i) the proceedings are in the early stages, (ii)
there is uncertainty as to the outcome of the pending appeals or
motions, and/or (iii) there are significant factual issues to be
resolved. However, for these cases, management does not believe,
based on currently available information, that the outcomes of
these proceedings will have a material adverse effect on the
Corporation's financial condition, though the outcomes could be
material to the Corporation's operating results for any particular
period, depending, in part, upon the operating results for such
period.
Founded in 1906 and based in Cleveland, Ohio, American Greetings
Corporation -- http://www.americangreetings.com/-- operates
predominantly in a single industry: the design, manufacture and
sale of everyday and seasonal greeting cards and other social
expression products. The Company manufactures or sells greeting
cards, gift packaging, party goods, stationery and giftware in
North America, primarily in the United States and Canada, and
throughout the world, primarily in the United Kingdom, Australia
and New Zealand. The Company's subsidiary, AG Interactive, Inc.,
distributes social expression products, including electronic
greetings and a broad range of graphics and digital services and
products, through a variety of electronic channels, including Web
sites, Internet portals and electronic mobile devices. The
Company also engages in design and character licensing and
manufactures custom display fixtures for its products and products
of others.
AMERICAN GREETINGS: Seeks Dismissal of "Wolfe Action II" in Ohio
----------------------------------------------------------------
American Greetings Corporation and other defendants have filed
their motions to dismiss the second class action lawsuit initiated
by R. David Wolfe, according to the Company's July 10, 2013, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended May 31, 2013.
On September 26, 2012, the Corporation announced that its Board of
Directors received a non-binding proposal from Zev Weiss, the
Corporation's Chief Executive Officer, and Jeffrey Weiss, the
Corporation's President and Chief Operating Officer, on behalf of
themselves and certain other members of the Weiss family and
related parties to acquire all of the outstanding Class A common
shares and Class B common shares of the Corporation not currently
owned by them (the "Going Private Proposal").
On March 29, 2013, the Corporation signed an agreement and plan of
merger (as amended on July 3, 2013, the "Merger Agreement") by and
among American Greetings Corporation, Century Intermediate Holding
Company ("Parent"), which upon the closing of the Merger will be
indirectly owned by the Family Shareholders, and Century Merger
Company, a wholly-owned subsidiary of Parent ("Merger Sub"). At
the effective time of the Merger, each issued and outstanding
share of the Corporation (other than shares owned by the
Corporation, Parent (which will include at the effective time of
the Merger all shares currently held by the Family Shareholders),
Merger Sub or holders who have properly exercised dissenters'
rights under Ohio law) will be converted into the right to receive
$19.00 per share, in cash, without interest and subject to any
withholding taxes, and Merger Sub will merge with and into the
Corporation, with the Corporation surviving the Merger as a
wholly-owned subsidiary of Parent (the "Merger"). Under the
Merger Agreement, "Family Shareholders" includes: Zev Weiss, a
director and the Corporation's Chief Executive Officer; Morry
Weiss, the Corporation's Chairman of the Board of Directors;
Jeffrey Weiss, a director and the Corporation's President and
Chief Operating Officer; and certain other members of the Weiss
family, together with the Irving I. Stone Limited Liability
Company.
On April 17, 2013, R. David Wolfe filed a new derivative and
putative class action ("Wolfe Action II") in the United States
District Court for the Northern District of Ohio against the
Corporation's directors, certain members of the Weiss Family, and
the Stone Entities, as well as the Corporation as a nominal
defendant, challenging the merger as financially and procedurally
unfair to the Corporation and its minority shareholders. Mr.
Wolfe subsequently filed an Amended Complaint on April 29, 2013.
The Wolfe Action II seeks a declaratory judgment that Article
Seventh precludes the Board of Directors and special committee
from approving the merger. In addition, the Wolfe Action II
includes a derivative claim for breach of fiduciary duty against
the Corporation's directors for allegedly violating Article
Seventh. Finally, the Wolfe Action II includes both a derivative
and class action claim for breach of fiduciary duty against the
Weiss Family defendants and the Stone Entities for allegedly
seeking to acquire the minority shareholders' interests at an
unfair price. The Defendants filed their Motions to Dismiss the
Wolfe Action II amended Complaint on July 8, 2013.
Management is unable to estimate a range of reasonably possible
losses for these cases in which the damages have not been
specified and (i) the proceedings are in the early stages, (ii)
there is uncertainty as to the outcome of the pending appeals or
motions, and/or (iii) there are significant factual issues to be
resolved. However, for these cases, management does not believe,
based on currently available information, that the outcomes of
these proceedings will have a material adverse effect on the
Corporation's financial condition, though the outcomes could be
material to the Corporation's operating results for any particular
period, depending, in part, upon the operating results for such
period.
Founded in 1906 and based in Cleveland, Ohio, American Greetings
Corporation -- http://www.americangreetings.com/-- operates
predominantly in a single industry: the design, manufacture and
sale of everyday and seasonal greeting cards and other social
expression products. The Company manufactures or sells greeting
cards, gift packaging, party goods, stationery and giftware in
North America, primarily in the United States and Canada, and
throughout the world, primarily in the United Kingdom, Australia
and New Zealand. The Company's subsidiary, AG Interactive, Inc.,
distributes social expression products, including electronic
greetings and a broad range of graphics and digital services and
products, through a variety of electronic channels, including Web
sites, Internet portals and electronic mobile devices. The
Company also engages in design and character licensing and
manufactures custom display fixtures for its products and products
of others.
AMERICAN GREETINGS: Appeals in "Wolfe" & LMPERS Suits Abandoned
---------------------------------------------------------------
American Greetings Corporation said in its July 10, 2013, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended May 31, 2013, that both R. David Wolfe and the
Louisiana Municipal Police Employees' Retirement System have
abandoned their appeals from the dismissal of their class action
lawsuits.
On September 26, 2012, the Corporation announced that its Board of
Directors received a non-binding proposal from Zev Weiss, the
Corporation's Chief Executive Officer, and Jeffrey Weiss, the
Corporation's President and Chief Operating Officer, on behalf of
themselves and certain other members of the Weiss family and
related parties to acquire all of the outstanding Class A common
shares and Class B common shares of the Corporation not currently
owned by them (the "Going Private Proposal").
On March 29, 2013, the Corporation signed an agreement and plan of
merger (as amended on July 3, 2013, the "Merger Agreement") by and
among American Greetings Corporation, Century Intermediate Holding
Company ("Parent"), which upon the closing of the Merger will be
indirectly owned by the Family Shareholders, and Century Merger
Company, a wholly-owned subsidiary of Parent ("Merger Sub"). At
the effective time of the Merger, each issued and outstanding
share of the Corporation (other than shares owned by the
Corporation, Parent (which will include at the effective time of
the Merger all shares currently held by the Family Shareholders),
Merger Sub or holders who have properly exercised dissenters'
rights under Ohio law) will be converted into the right to receive
$19.00 per share, in cash, without interest and subject to any
withholding taxes, and Merger Sub will merge with and into the
Corporation, with the Corporation surviving the Merger as a
wholly-owned subsidiary of Parent (the "Merger"). Under the
Merger Agreement, "Family Shareholders" includes: Zev Weiss, a
director and the Corporation's Chief Executive Officer; Morry
Weiss, the Corporation's Chairman of the Board of Directors;
Jeffrey Weiss, a director and the Corporation's President and
Chief Operating Officer; and certain other members of the Weiss
family, together with the Irving I. Stone Limited Liability
Company.
On November 6, 2012, R. David Wolfe, a purported shareholder,
filed a putative class action (the "Wolfe Action") in the United
States District Court for the Northern District of Ohio (the
"Federal Court") against certain members of the Weiss Family and
the Irving I. Stone Oversight Trust, the Irving Stone Limited
Liability Company, the Irving I. Stone Support Foundation, and the
Irving I. Stone Foundation ("Stone Entities") alleging breach of
fiduciary duties in proposing and pursuing the proposal, as well
as against American Greetings, seeking, among other things,
declaratory relief. Shortly thereafter, on November 9, 2012, the
Louisiana Municipal Police Employees' Retirement System also filed
a purported class action in the Federal Court (the "LMPERS
Action") asserting substantially similar claims against the same
defendants and seeking substantially similar relief.
On November 30, 2012, the plaintiffs in the Wolfe and LMPERS
Actions filed motions (1) to consolidate the Wolfe and LMPERS
Actions, (2) for appointment as co-lead plaintiffs, (3) for
appointment of co-lead counsel, and, in the Wolfe Action only, (4)
for partial summary judgment. On December 14, 2012, the
Corporation filed its oppositions to the motions (a) to
consolidate the Wolfe and LMPERS Actions, (b) for appointment as
co-lead plaintiffs, and (c) for appointment of co-lead counsel. On
the same day, the Corporation also moved to dismiss both the Wolfe
and LMPERS Actions. The Corporation answered both complaints on
January 8, 2013, and on January 11, 2013, it filed its opposition
to the motion for partial summary judgment. On February 14, 2013,
the Federal Court dismissed both the Wolfe and LMPERS Actions for
lack of subject matter jurisdiction. On March 15, 2013, the
plaintiffs in both the Wolfe and LMPERS Actions filed notices of
appeal with the Sixth Circuit Court of Appeals. On April 18,
2013, plaintiff Wolfe moved to dismiss his appeal, which motion
was granted on April 19, 2013. On May 8, 2013, plaintiff LMPERS's
moved to dismiss its appeal as well, which motion was granted.
The Plaintiffs in the Wolfe and LMPERS Actions alleged, in part,
that Article Seventh of the Corporation's articles of
incorporation prohibited the special committee from, among other
things, evaluating the merger. The Corporation considered these
allegations and concluded that the Article is co-extensive with
Ohio law and thus allows the Corporation to engage in any activity
authorized by Ohio law. The Corporation also has consistently
construed Article Seventh as permitting directors to approve a
transaction so long as they are both disinterested and
independent.
Management is unable to estimate a range of reasonably possible
losses for these cases in which the damages have not been
specified and (i) the proceedings are in the early stages, (ii)
there is uncertainty as to the outcome of the pending appeals or
motions, and/or (iii) there are significant factual issues to be
resolved. However, for these cases, management does not believe,
based on currently available information, that the outcomes of
these proceedings will have a material adverse effect on the
Corporation's financial condition, though the outcomes could be
material to the Corporation's operating results for any particular
period, depending, in part, upon the operating results for such
period.
Founded in 1906 and based in Cleveland, Ohio, American Greetings
Corporation -- http://www.americangreetings.com/-- operates
predominantly in a single industry: the design, manufacture and
sale of everyday and seasonal greeting cards and other social
expression products. The Company manufactures or sells greeting
cards, gift packaging, party goods, stationery and giftware in
North America, primarily in the United States and Canada, and
throughout the world, primarily in the United Kingdom, Australia
and New Zealand. The Company's subsidiary, AG Interactive, Inc.,
distributes social expression products, including electronic
greetings and a broad range of graphics and digital services and
products, through a variety of electronic channels, including Web
sites, Internet portals and electronic mobile devices. The
Company also engages in design and character licensing and
manufactures custom display fixtures for its products and products
of others.
AMERICAN ORIENTAL: Still Awaits Ruling on Bid to Junk Class Suit
----------------------------------------------------------------
American Oriental Bioengineering, Inc., is still awaiting a court
decision on a motion to dismiss a securities class action lawsuit
pending in California, according to the Company's July 10, 2013,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended March 31, 2013.
On June 22, 2012, a putative class action complaint was filed by
Kevin McGee against American Oriental Bioengineering Inc, Eileen
Brody, Binsheng Li, Yangchun Li, Tony Liu, Cosimo Patti, Xianmin
Wang, and Lawrence Wizel alleging violations of Section 10b of the
Securities Exchange Act of 1934 and liability pursuant to Section
20(a) thereunder. The complaint, as subsequently amended centers
on the accounting treatment of the sale of an interest held by the
Company's subsidiary, Nuo Hua Investment Company Limited and the
Company's Restatement filed on November 14, 2011. Several motions
were filed for appointment as lead plaintiff, and on October 16,
2012, the Court appointed lead plaintiff, consolidated the cases,
and ordered that a consolidated complaint be filed, which occurred
on November 19, 2012. The served defendants (AOB, Brody, Wizel
and Patti) moved to dismiss the consolidated complaint, and on
March 25, 2013 those motions were granted with leave to amend.
On April 15, 2013, the Plaintiffs filed a Second Amended
Complaint, which the served Defendants moved to dismiss on May 15,
2013. In the interim, the Court granted the Plaintiffs' motion
for leave to serve most of the remaining Defendants by alternative
means, and on May 15, 2013, the parties entered into a stipulation
consenting to the filing of a Third Amended Complaint ("TAC,"
setting forth no new paragraphs), deeming the TAC served on all
defendants, deeming the motion to dismiss the Second Amended
Complaint interposed against the TAC, and reserving all rights of
the un-served Defendants.
American Oriental Bioengineering, Inc. -- http://www.bioaobo.com/
-- is a Beijing, China-based, vertically integrated pharmaceutical
company dedicated to improving health through the development,
manufacture and commercialization of a broad range of
pharmaceutical and healthcare products. A majority of the
Company's current products are manufactured using plant based
materials. The Company's business is comprised of prescription
pharmaceutical products, over-the-counter pharmaceutical products
and nutraceutical products.
BAYER HEALTHCARE: Faces Suit in Texas Over Mirena System
--------------------------------------------------------
Michelle Keahey, writing for Southeast Texas Record, reports that
a Hardin County woman has filed a lawsuit against the intrauterine
system Mirena claiming that the device migrated into her abdominal
cavity and she needed surgery to remove it.
Rachael Coe filed suit against Bayer Healthcare Pharmaceuticals
Inc. on July 24 in the Eastern District of Texas, Beaumont
Division.
Mirena is an intrauterine system that is inserted by a healthcare
provider and releases a prescription medication used as a
contraceptive.
Ms. Coe had the Mirena IUS inserted in June 2006 by Dr. Teresa
Hill. According to the lawsuit, the contraceptive insertion was
uncomplicated and was properly placed.
Ms. Coe states that she began to experience fatigue, abdominal
pain, pelvic pain, abnormal bleeding, back pain, ovarian cysts,
urinary incontinence and other issues. In 2008, Dr. Hill could
not locate the IUD by digital examination and two subsequent
ultrasounds, according to the lawsuit.
In August 2010, Ms. Coe sought treatment at a local hospital
emergency room and a CT scan discovered the IUD had perforated
Ms. Coe's uterus and migrated into her abdominal cavity, the suit
states.
"Mirena's label does not warn about spontaneous migration of the
IUS, but only states that migration may occur if the uterus is
perforated during insertion," the lawsuit states.
The defendant is accused of defective manufacturing, design
defect, negligence, failure to warn, strict liability, breach of
implied warranty, breach of express warranty, fraudulent
misrepresentation and fraud by concealment.
The plaintiff is seeking an award of compensatory, statutory and
punitive damages, interest, court costs and attorney's fees.
Ms. Coe is represented by B. Adam Terrell of Weller, Green, Toups
& Terrell LP in Beaumont. A jury trial is requested.
U.S. District Judge Marcia A. Crone is assigned to the case.
Case No. 1:13-cv-00472
BERNARD MADOFF: Nears Settlement With Investors in Ponzi Scheme
---------------------------------------------------------------
Brown, PC reports that a group of investors involved in the
historic Bernard L Madoff ponzi scheme are nearing a settlement
with a Connecticut bank that should have uncovered the fraud years
before it collapsed. The settlement would return a fraction of
the $60 million that the investors said they lost, but that news
is far from good for the Connecticut Community Bank and its
branch, Westport National Bank, which are controlled by William R.
Berkley.
With four years of consistent losses and a $28 million in lawsuit
on their hands, Connecticut Community Bank is far from being a
role model in the banking world. In fact, it has done so poorly
that it is under formal order from the Office of Comptroller of
the Currency demanding operational improvements due to "unsafe and
unsound" practices and violations of the law. The bank's general
counsel along with bank's president have declined to comment on
any of the suits. In regards to the trial, the bank swears that
it had few responsibilities beyond keeping records on fictitious
accounts provided by the Madoff firm and handling the occasional
requests for redemptions and collecting fees.
This story is all well and good except for the fact that when
Mr. Madoff's elaborate scheme collapsed, about $60 million
invested by the bank was lost in one of the largest Ponzi schemes
in history. Brown, PC said "Now if my bank were to maladminister
$60 million I'd be a bit concerned. I might even sue them, and
that's exactly the route these investors have taken on the basis
that Connecticut Community Bank failed to take steps to verify
that Mr. Madoff held their assets and was earning the steady
returns that he claimed."
These are serious accusations, indeed. Would it be ridiculous to
think a bank as large as this one might be cutting corners?
According to the officer who oversaw these accounts, he had
received bundles of trading records from Mr. Madoff but had tucked
them in files without verifying them. With a case as messy as
this, is anyone surprised?
There were three separate federal suits by the customers, and a
fourth in state court in Connecticut. Customers in two of the
three federal suits have agreed to settle, but a dollar amount
hasn't been disclosed. Closing arguments in Mr. Gard's case,
which involved two bank customers from Florida seeking $1.2
million, were scheduled for July 29. With a reported losses of
$21 million since 2009 and capital of $39 million reported in
March, these lawsuits couldn't have come at a more inconvenient
time. At least they have liability insurance, right? Wrong. Its
coverage was canceled in this case because of an exemption for
bankruptcies like Mr. Madoff's firm. The bank attempted to sue
its insurer but lost. In 2009 it signed a 26-page formal written
agreement with Comptroller requiring a better board and
improvements in every aspect of business.
BORGATA CASINO: Obtains Favorable Ruling in Sex Bias Suit
---------------------------------------------------------
Mary Pat Gallagher, writing for New Jersey Law Journal, reports
that The Borgata Casino and Spa has successfully fought off a suit
by 22 women employees over its weight-gain policy and form-fitting
outfits.
Atlantic County Superior Court Judge Nelson Johnson said he saw no
sex bias, based on the nature of the "Bogata Babes" job -- part
cocktail waitress, part entertainer -- and what they agreed to and
understood about the job when hired. So he dismissed the suit on
summary judgment and gave his reasons in an opinion made public on
July 23.
The plaintiffs worked as "costumed beverage servers" at the
Atlantic City casino and sued under the Law Against Discrimination
(LAD), alleging they were humiliated by being treated as sex
objects and treated differently from male "Babes." They had
signed Borgata's "Personal Appearance Standards" policy, which
stated they had to appear physically fit with a "clean healthy
smile," pay "attention to personal grooming," maintain the same
basic physical appearance and appear comfortable in their uniforms
-- miniskirts, bustiers, bolero jackets and high heels.
Judge Johnson pointed out that the costumes were designed by Zac
Posen, a judge on the Project Runway reality TV show who was known
for "stream-lined and very tailored" couture.
When the Borgata opened in 2003, it required weight "proportional
to height," but in 2005 changed the policy to allow no more than a
7 percent gain above current weight, or for newer employees, their
weight when hired.
The 7 percent purportedly represented the gain that would require
a person to go up a clothing size.
Babes were subject to weigh-ins, and if they gained too many
pounds, other than as the result of a "bona fide medical
condition," could be immediately suspended without pay for 90
days, during which they were to lose weight through a program that
included gym membership, Weight Watchers and nutritional
counseling paid for by Borgata.
Borgata revised the policy again, in 2009, allowing Babes to keep
working while they shed excess pounds. Those returning to work
after maternity leave or other medical leave got 90 days to meet
the weight standard.
During the relevant time period, February 2005 to December 2012,
686 women and 46 men worked as Borgata Babes. Twenty-five women
were disciplined for weight gain -- a few more than once -- and
none of the men.
The plaintiffs claimed they felt harassed by the weigh-ins and
resorted to bulimia, "starving" and medication to keep from
gaining weight. They also alleged that men who gained too much
weight were not disciplined and that some who did not dress
according to the policy were not penalized.
Judge Johnson's rejection of the plaintiffs' claims was based on
an LAD provision that took effect in 2007 and had never been
construed by a court, to his knowledge or that of the lawyers in
the case.
The provision, N.J.S.A. 10:5-12p, states that the law's
prohibition against discrimination does not affect the "ability of
an employer to require employees to adhere to reasonable workplace
appearance, grooming and dress standards," so long as they don't
interfere with gender identity or expression or violate other
laws.
Judge Johnson found Borgata's weight and dress standards were
reasonable given the nature of the casino business, the
expectations of casino patrons and the Las Vegas-style image
Borgata sought to project from its opening in 2003 as "the place
to go for a naughty but classy good time in elegant surroundings."
Borgata was clear from the start about the role of the Babes as
"ambassadors of hospitality" and entertainers as exemplified in
the standards it imposed and the way it went about the hiring.
When the casino opened, 4,000 people applied for the job and those
who made it through two interviews had to audition, serving faux
customers in revealing costumes. They were told on hiring that
they would be known as "Borgata Babes."
Judge Johnson acknowledged that the term "babe" "oozes sexual
objectification" and from his perspective, the word was "at best
undignified and at worst degrading." But the plaintiffs "cannot
shed the label" they embraced when they went to work for the
Borgata, wrote Nelson, adding there was no indication they were
forced or duped into agreeing to the appearance requirements. The
gender stereotyping they faced was not illegal, given they were
hired based on their looks, he said.
Employers can show a preference for those whose are attractive in
a sexually stereotypical way but cannot use such stereotypes to
disadvantage one sex over the other, Judge Johnson said. He added
there was no claim that the men were praised for gaining weight or
being unattractive.
Judge Johnson noted the lack of evidence of disparate treatment,
pointing out that the plaintiffs never deposed the men who they
said violated weight and appearance rules, nor provided photos of
them, which should have been easy to obtain from casino
surveillance cameras or cellphones.
Borgata lawyer Rene Johnson -- rjohnson@morganlewis.com --
declined comment, but her firm, Morgan Lewis & Bockius in
Princeton, released a statement by Borgata senior vice president
of operations Joe Lupo, saying the court agreed with its long-held
position that the personal appearance policy is lawful and
reasonable.
Deborah Mains of Costello & Mains in Mount Laurel, who represents
all but one of the plaintiffs, was on vacation and could not be
reached.
Metuchen solo Susan Schleck Kleiner, the lawyer for remaining
plaintiff Latesha Stewart, who settled earlier, declines comment.
CALIFORNIA: Dismissal of Inmate's Claim in "Pride" Suit Reversed
----------------------------------------------------------------
The United States Court of Appeals for the Ninth Circuit reversed
a district court's dismissal of a claim for injunctive relief in
DAVID CODELL PRIDE, JR., Plaintiff-Appellant, v. M. CORREA; LEVIN,
Dr.; T. OCHOA, Warden; SANTIAGO, Dr., Defendants-Appellees, NO.
10-56036.
Plaintiff-Appellant David Pride is a California state prisoner. In
an action brought under 42 U.S.C. Section 1983, Mr. Pride claims
that Defendants-Appellees, officials and employees of Calipatria
Prison, violated his Eighth Amendment rights by acting with
deliberate indifference towards his serious medical needs. He
seeks damages and injunctive relief concerning his own individual
medical treatment. The district court dismissed Mr. Pride's claim
for injunctive relief on the ground that his claim is already
being provided for in the class action Plata v. Brown, No. C01-
1351 THE, pending in the Northern District of California.
The Ninth Circuit holds that because Pride's claim for injunctive
relief concerns only his individual medical care, his claim is not
already encompassed in the Plata litigation, which seeks systemic
reform of medical care in California prisons. The Ninth Circuit,
therefore, reverses the district court's dismissal of Mr. Pride's
claim for injunctive relief and remands to the district court for
further proceedings consistent with this disposition.
A copy of the Circuit Court's July 16, 2013 Opinion is available
at http://is.gd/owQ48Pfrom Leagle.com.
Johanna S. Schiavoni -- johanna.schiavoni@jsslegal.com --
(argued), at Jacobs Schlesinger & Sheppard LLP, San Diego,
California, for Plaintiff-Appellant.
Vickie P. Whitney -- Vickie.Whitney@doj.ca.gov -- (argued), Deputy
Attorney General, Sacramento, California; William N. Frank, Deputy
Attorney General; Thomas S. Patterson, Supervising Deputy Attorney
General; Jonathan L. Wolff, Senior Assistant Attorney General;
Kamala D. Harris, Attorney General of California, Los Angeles,
California, for Defendants-Appellees.
CARMAX INC: Awaits Ruling on Petition for Review in "Fowler" Suit
-----------------------------------------------------------------
CarMax, Inc. is awaiting a ruling on its petition for review with
the California Supreme Court, according to the Company's July 9,
2013, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended May 31, 2013.
On April 2, 2008, Mr. John Fowler filed a putative class action
lawsuit against CarMax Auto Superstores California, LLC and CarMax
Auto Superstores West Coast, Inc. in the Superior Court of
California, County of Los Angeles. Subsequently, two other
lawsuits, Leena Areso et al. v. CarMax Auto Superstores
California, LLC and Justin Weaver v. CarMax Auto Superstores
California, LLC, were consolidated as part of the Fowler case.
The allegations in the consolidated case involved: (1) failure to
provide meal and rest breaks or compensation in lieu thereof; (2)
failure to pay wages of terminated or resigned employees related
to meal and rest breaks and overtime; (3) failure to pay overtime;
(4) failure to comply with itemized employee wage statement
provisions; (5) unfair competition; and (6) California's Labor
Code Private Attorney General Act. The putative class consisted
of sales consultants, sales managers, and other hourly employees
who worked for the company in California from April 2, 2004, to
the present. On May 12, 2009, the court dismissed all of the
class claims with respect to the sales manager putative class. On
June 16, 2009, the court dismissed all claims related to the
failure to comply with the itemized employee wage statement
provisions. The court also granted CarMax's motion for summary
adjudication with regard to CarMax's alleged failure to pay
overtime to the sales consultant putative class. The plaintiffs
appealed the court's ruling regarding the sales consultant
overtime claim. On May 20, 2011, the California Court of Appeal
affirmed the ruling in favor of CarMax. The plaintiffs filed a
Petition of Review with the California Supreme Court, which was
denied. As a result, the plaintiffs' overtime claims are no
longer a part of the lawsuit.
The claims currently remaining in the lawsuit regarding the sales
consultant putative class are: (1) failure to provide meal and
rest breaks or compensation in lieu thereof; (2) failure to pay
wages of terminated or resigned employees related to meal and rest
breaks; (3) unfair competition; and (4) California's Labor Code
Private Attorney General Act. On June 16, 2009, the court entered
a stay of these claims pending the outcome of a California Supreme
Court case involving unrelated third parties but related legal
issues. Subsequently, CarMax moved to lift the stay and compel
the plaintiffs' remaining claims into arbitration on an individual
basis, which the court granted on November 21, 2011. The
plaintiffs appealed the court's ruling to the California Court of
Appeal.
On March 26, 2013, the California Court of Appeal reversed the
trial court's order granting CarMax's motion to compel
arbitration. CarMax is pursuing an appeal of this decision and
has filed a Petition for Review with the California Supreme Court.
The Fowler lawsuit seeks compensatory and special damages, wages,
interest, civil and statutory penalties, restitution, injunctive
relief and the recovery of attorneys' fees.
The Company says it is unable to make a reasonable estimate of the
amount or range of loss that could result from an unfavorable
outcome in these matters.
Richmond, Virginia-based CarMax, Inc., including its wholly owned
subsidiaries, is the largest retailer of used vehicles in the
United States. The Company operates in two reportable segments:
CarMax Sales Operations, which consists of all aspects of the
Company's auto merchandising and service operations, excluding
financing provided by CAF, and CarMax Auto Finance, which consists
solely of the Company's own finance operation that provides
vehicle financing through CarMax superstores.
CELLCO PARTNERSHIP: Did Not Pay OT and Minimum Wages, Suit Says
---------------------------------------------------------------
Courthouse News Service reports that CellCo Partnership, doing
business as Verizon Wireless, stiffed workers for overtime and
minimum wages, a class action claims in the Superior Court of
California (Sacramento).
CHEMROY CANADA: Recalls Sensory Effects Brand Maple NF RT
---------------------------------------------------------
Starting date: July 22, 2013
Type of communication: Recall
Alert sub-type: Notification
Subcategory: Microbiological - Salmonella
Hazard classification: Class 2
Source of recall: Canadian Food Inspection
Agency
Recalling firm: Chemroy Canada Inc.
Distribution: Quebec
Extent of the product distribution: Warehouse
CFIA reference number: 8182
Affected products:
Brand name Common name Size Code(s) on product UPC
---------- ----------- ---- ------------------ ----
SensoryEffects Maple NT RF 50 lb Product 20526-50 None
Lot #2013-36707
CIGNA CORPORATION: Loses Judgment Bid in "Executive Risk" Case
--------------------------------------------------------------
The Superior Court of Pennsylvania affirmed a trial court order
denying Cigna Corporation's request for judgment in EXECUTIVE RISK
INDEMNITY, INC. Appellee, v. CIGNA CORPORATION Appellant, NO. 1117
EDA 2012.
Cigna Corporation appealed from a trial court's order denying its
request for a judgment and reaffirming its prior order entering
declaratory judgment in favor of Appellee, Executive Risk
Indemnity, Inc., and against Cigna on all claims.
The underlying litigation involves an insurance coverage dispute
between Cigna, as an insured, and its excess insurer, Executive
Risk Indemnity, Inc. After Cigna settled class-action claims for
breach of contract and violations of the Racketeer Influenced and
Corrupt Organizations Act (RICO), it submitted a claim to
Executive Risk for indemnification of settlement payments and
defense costs. Executive Risk refused to indemnify Cigna and, in
fact, Executive Risk filed a complaint seeking declaratory
judgment against Cigna; Cigna counterclaimed, seeking a
declaration that Executive Risk had an obligation to indemnify it.
In addition, Cigna brought a bad faith claim against Executive
Risk arising from its failure to provide timely coverage.
After an extensive discovery process, the parties filed cross-
motions for summary judgment. On March 19, 2008, the trial court
granted Executive Risk's motion on all claims and denied Cigna's
motion.
Cigna appealed and the Superior Court of Pennsylvania issued a
decision reversing summary judgment, finding that while the breach
of contract claims were excluded under the policy, the RICO claims
fell within the policy definitions of "claim" and "loss" and
within the general terms of the policy. The Court also remanded
the case to the trial court so that it could address the
"allocation of claims between the covered RICO claims and excluded
breach of contract claims." The Court found that because the case
had settled, an allocation trial/hearing was necessary so that
indemnification could be properly distributed between the covered
and excluded claims.
The Honorable Mark I. Bernstein heard arguments and accepted
evidence on the allocation issue for two days in November 2010,
placing the burden upon Cigna to prove the allocation of
settlement monies between the two classes of claims. At the
hearing, neither party produced expert testimony to opine what, in
retrospect, the allocation of funds should have been at the time
of settlement. The court reasonably allocated $3,827,287 each, for
attorneys' fees and defense costs solely for the parties' contract
claims. However, there was insufficient evidence to prove what
percentage of those defense costs went toward defending solely
covered claims and what portion of attorneys' fees were being paid
on which class of claims. Ultimately, the trial court found that
Cigna failed to meet its burden and reaffirmed its prior judgment
entered in favor of Executive Risk on all claims. Cigna filed
post-trial motions that were denied. This appeal followed.
A copy of the Superior Court's July 18, 2013 Opinion is available
at http://is.gd/BNr2VY from Leagle.com.
CLEAVER BROOKS: Weitz & Luxenberg Gets $190MM Asbestos Verdict
--------------------------------------------------------------
Prominent mass tort and personal injury litigation firm Weitz &
Luxenberg, P.C. on July 24 announced a verdict in a lawsuit
brought by five men who were exposed to a deadly carcinogen when
their jobs as steamfitters, plumbers, and construction workers
brought them in contact with asbestos-tainted products and
equipment.
A panel of New York Supreme Court jurors returned a verdict on
July 23, finding that two defendant companies had acted
negligently and recklessly, then rendering a verdict worth a total
of $190 million.
The verdict is the largest consolidated asbestos verdict in New
York history, and it is believed that the $60 million individual
amounts two of the men received are the largest individual sums
awarded in a New York asbestos case.
Weitz & Luxenberg's trial team of Adam Cooper, Danny Kraft, Jr.,
and Daniel Blouin began the trial on May 10. Mr. Cooper said that
the 11-week-long trial had involved countless hours of work and
strategy on the part of the firm's attorneys, as well as
tremendous endurance on the part of its clients.
Weitz & Luxenberg attorneys Kyle Shamberg and Dan Horner
contributed significantly to the verdict with legal briefing and
research.
Mr. Blouin said he and his team tackled the case by telling the
jury a story of five men who worked honest jobs for decades only
to be repaid with immense suffering. "We wanted to show the jury
the sorrow our clients were and are going through," Mr. Blouin
said. "And not just physically but psychologically. Once you are
exposed to asbestos and develop mesothelioma, you know your fate.
It's an unbearably heavy burden."
Mr. Kraft echoed the sentiment, calling the historically large
verdict "more than fair."
"I told the jury there wasn't an amount they could give these men
that would be unreasonable," Mr. Kraft said. "The defendants in
this case subjected thousands of men and women to a terribly toxic
substance. It is likely these companies took a calculated risk in
doing so. That isn't a debt that can be repaid. [Wednes]day I am
pleased we were able to help our clients achieve a very good
result, but I will always know that no monetary amount can restore
their health and peace of mind."
The jury, returning a verdict at 4 p.m. on Jul. 23, found both
defendants -- boiler companies Cleaver Brooks and Burnham --
negligent in having failed to warn about the dangers of the
asbestos used in connection with their equipment. The verdict
said both companies had acted with reckless disregard for human
life.
All five of Weitz & Luxenberg's clients, Mr. Cooper said, were
tradesmen from the tri-state area.
One man, from Toms River, NJ, worked in the 50s and 60s as a
pipefitter in the Brooklyn Navy Yard. He was exposed to asbestos
daily while fitting pipes into the salt-water distilling units
aboard aircraft carriers like the USS Constellation and USS
Independence.
Another, from Oyster Bay, NY, worked for nearly 30 years as a
plumber, handling dozens of different types of products
contaminated with asbestos.
A third, of Middle Village, NY, was also exposed to asbestos
working as a plumber in Brooklyn, Queens, and Rockland Co.
Another man, from Howard Beach, NY, was exposed to asbestos on the
job as a painter and construction worker. He was involved with
the removal and demolition of boilers containing asbestos-laden
parts.
The final client, from Kent, Conn., also worked with boilers and
boiler parts in the course of his job as a steamfitter.
All five men developed mesothelioma as a result of asbestos
exposure. Three have died of complications related to the
disease.
The trial (Index Nos. 190008/12, 190026/12, 190200/12, 190183/12,
190184/12) was held in New York Supreme Court before Judge Joan
Madden.
Mesothelioma is an aggressive cancer (the life expectancy for
mesothelioma sufferers is among the lowest for any cancer) that
attacks the lining of the lungs, heart, or abdominal organs. The
cancer's only known cause is asbestos.
About Weitz & Luxenberg
Founded in 1986 by attorneys Perry Weitz and Arthur Luxenberg,
Weitz & Luxenberg, P.C., concentrates its practice in numerous
litigation areas including: mesothelioma, defective medicine and
devices, environmental pollutants, accidents, personal injury, and
medical malpractice.
CLIC INTERNATIONAL: Recalls Clic & Al Nakhil Sesame Paste Tahina
----------------------------------------------------------------
Starting date: July 29, 2013
Type of communication: Recall
Alert sub-type: Updated Health Hazard Alert
Subcategory: Microbiological - Salmonella
Hazard classification: Class 2
Source of recall: Canadian Food Inspection
Agency
Recalling firm: Clic International Inc.
Distribution: Quebec, Ontario
Extent of the product distribution: Retail
Affected products:
Brand name Common name Size Code(s) on product
---------- ----------- ---- ------------------
Clic Sesame Paste Tahina 454 g LOT#1212/13
Clic Sesame Paste Tahina 907 g LOT#1212/13
Al Nakhil Sesame Paste Tahina 454 g LOT#1432/12
The public warning issued on July 16, 2013 has been updated to
include additional products.
The Canadian Food Inspection Agency (CFIA) and Clic International
Inc. are warning the public not to consume the Tahina products
described because they may be contaminated with Salmonella.
There have been no reported illnesses associated with the
consumption of these products.
The importer, Clic International Inc., Laval, Quebec, is
voluntarily recalling the affected products from the marketplace.
The CFIA is monitoring the effectiveness of the recall.
DEUTSCHE BANK: 2nd Cir. Affirms Dismissal of "Adams" Class Action
-----------------------------------------------------------------
The United States Court of Appeals, Second Circuit, affirmed a
District Court judgment in SCOTT ADAMS, BLACKWOOD VENTURES, LLC,
WILLIAM G. NESBITT, MURCHISON VENTURES, LLC, STEVEN J. UMBERGER,
QUEETS VENTURES, LLC, Plaintiffs-Appellants, v. DEUTSCHE BANK AG,
DEUTSCHE BANK SECURITIES INC., Defendants-Appellees, No.
12-4259-CV.
Scott Adams, Blackwood Ventures, LLC, William G. Nesbitt,
Murchison Ventures, LLC, Steven J. Umberger, and Queets Ventures,
LLC (the "Adams Plaintiffs") took an appeal from a September 24,
2012 judgment of the United States District Court for the Southern
District of New York dismissing their second amended complaint in
its entirety.
For the first time on appeal, the Adams Plaintiffs argued that
Blackwood Ventures, LLC, Murchison Ventures, LLC, and Queets
Ventures are residents of Delaware, which recognizes cross-
jurisdictional tolling. The Second Circuit concludes that this
argument is forfeited, as it does not consider a legal theory not
raised before the district court "[i]n the absence of `manifest
injustice.'"
According to the Second Circuit, plaintiffs are Florida residents.
Florida provides the shorter statute of limitations, and thus
governs the timeliness of the Adams Plaintiffs' claims. Florida's
statute of limitations for fraud and fiduciary duty claims is four
years, running from when the facts giving rise to it were
discovered or should have been discovered with the exercise of due
diligence. The statute of limitations for a breach of contract
claim is five years, running from the date of accrual. Critically,
Florida does not allow tolling during the pendency of class action
lawsuits no matter where they are filed.
"Because Florida so clearly prohibits tolling during the pendency
of class action lawsuits, regardless of where filed, the Adams
Plaintiffs' claims are time-barred," rules the Second Circuit.
The Second Circuit further holds that the remainder of the Adams
Plaintiffs' claims is without merit. Accordingly, the judgment of
the district court is affirmed, with each side bearing its own
costs.
A copy of the Circuit Court's July 16, 2013 Summary Order is
available at http://is.gd/xM6P8Afrom Leagle.com.
Brian G. Isaacson -- briani@isaacsonlawfirm.com -- at Isaacson Law
Firm, P.L.L.C., Seattle, WA., Appearing for Appellants.
Keith Blackman -- kblackman@dsllp.com -- (Joshua C. Klein --
jklein@dsllp.com -- Allan N. Taffet -- ataffet@dsllp.com -- on the
brief), at Duval & Stachenfeld LLP, New York, NY, Appearing for
Appellees.
DR. REDDY'S: Trial in Nexium-Related Suits Set for February 2014
----------------------------------------------------------------
Trial is currently scheduled for February 2014 in the consolidated
antitrust class action lawsuit relating to Nexium, according to
Dr. Reddy's Laboratories Limited's July 10, 2013, Form 20-F filing
with the U.S. Securities and Exchange Commission for the year
ended March 31, 2013.
Five federal antitrust class action lawsuits have been brought on
behalf of direct purchasers of Nexium, and ten federal class
action lawsuits have been brought under both state and federal law
on behalf of end-payors of Nexium. These actions have been filed
against various generic manufacturers, including the Company and
its U.S. subsidiary Dr. Reddy's Laboratories, Inc. These actions
have been consolidated in the United States District Court for the
District of Massachusetts.
The complaints allege that, beginning in 2005, AstraZeneca sued
various generic manufacturers, including the Company, for
infringement with respect to patents purporting to cover
AstraZeneca's branded drug, Nexium.
The Plaintiffs allege that AstraZeneca's settlement agreements
with these various generic manufacturers, including the Company,
violated federal and state antitrust laws, as well as state unfair
competition laws. The complaints seek unspecified damages for
class members as a result of an alleged delay in the entry of
generic versions of Nexium.
The Company believes that each of these complaints lacks merit and
that the Company's conduct complied with all applicable laws and
regulations. All of the defendants, including the Company, filed
motions to dismiss the complaints, which motions were denied in
April 2013. Discovery is ongoing, and a trial is currently
scheduled for February 2014.
Established in 1984 and based in Andhra Pradesh, India, Dr.
Reddy's Laboratories Limited -- http://www.drreddys.com/-- is an
integrated global pharmaceutical company committed to providing
affordable and innovative medicines through the Company's three
core business segments: Global Generics segment, which includes
its branded and unbranded prescription and over-the-counter drug
products business; Pharmaceutical Services and Active Ingredients
segment, which consists of its Active Pharmaceutical Ingredients
business and Custom Pharmaceutical Services business; and
Proprietary Products segment, which consists of its New Chemical
Entities business, its Differentiated Formulations business and
its dermatology focused specialty business operated through
Promius(TM) Pharma.
DYNAVAX TECHNOLOGIES: August 19 Lead Plaintiff Deadline Set
-----------------------------------------------------------
Law Offices of Howard G. Smith on July 27 disclosed that investors
of Dynavax Technologies Corporation have until August 19, 2013 to
move the Court to serve as lead plaintiff in the securities fraud
class action lawsuit filed in the United States District Court for
the Northern District of California on behalf of a class
comprising all purchasers of Dynavax securities between April 26,
2012 and June 10, 2013, inclusive.
Dynavax discovers and develops novel products to prevent and treat
infectious and inflammatory diseases. The Company's product
candidate, Heplisav, is a Phase 3 investigational adult hepatitis
B vaccine. The Complaint alleges that during the Class Period the
Company issued false and/or misleading statements and/or failed to
disclose that: (1) the clinical trial for Heplisav was flawed
because the trial demographics were not representative of the U.S.
population; (2) the Heplisav clinical trial was lacking the one-
year safety follow-up typically required for vaccines; (3) the
trial was lacking information concerning concomitant use with
other vaccines; (4) the clinical trial's safety database was
inadequate to rule out rare adverse autoimmune events; (5) Dynavax
failed to provide the FDA with sufficient data on its concerning
its manufacturing processes and controls for Heplisav; and (6)
based on the foregoing, defendants lacked a reasonable basis for
their positive statements about the Company's outlook, including
statements about its launch of Heplisav in 2013.
If you are a member of the Class described above, you have certain
rights and have until August 19, 2013 to move for lead plaintiff
status. To be a member of the class you need not take any action
at this time, or may retain counsel of your choice. If you
purchased shares prior to the Class Period or wish to learn more
concerning your rights or interests with respect to these matters,
please contact:
Law Offices of Howard G. Smith
Howard G. Smith, Esquire
3070 Bristol Pike, Suite 112
Bensalem, PA 19020
Telephone: (215) 638-4847
(888) 638-4847
E-mail: howardsmith@howardsmithlaw.com
Web site: http://www.howardsmithlaw.com
EXXON MOBIL: Appeals Court Affirms $105MM Judgment in MTBE Suit
---------------------------------------------------------------
Brendan Pierson, writing for New York Law Journal, reports that a
federal appeals court has affirmed a $105 million judgment for New
York City against Exxon Mobil Corp. over the petroleum giant's
contamination of groundwater with the gasoline additive methyl
tertiary butyl ether, or MTBE, used until the mid-2000s to reduce
emissions.
In In re: MTBE Products Liability Litigation, 10-4135, a three-
judge panel of the U.S. Court of Appeals for the Second Circuit
rejected Exxon's arguments that the city's claims were preempted
by the federal Clean Air Act and that the trial was tainted by
juror misconduct. Judge Susan Carney wrote the opinion, joined by
Judges Barrington Parker Jr. and Peter Hall.
New York City's case against Exxon is one of a slew of similar
cases over MTBE contamination filed by cities, states and
individuals around the country. Those cases were consolidated in
the Southern District of New York in a multidistrict litigation.
The city's case was chosen as a so-called bellwether trial, to
give parties in the multidistrict litigation an idea of the likely
outcome of trials.
The judgment, plus pre- and post-judgment interest, was entered
after an 11-week jury trial in October 2009 before Judge Shira
Scheindlin (NYLJ, Oct. 20, 2009).
Exxon spokesman Todd Spitler said the company would appeal to the
U.S. Supreme Court.
"MTBE was added to gasoline to meet regulatory requirements to
solve U.S. air pollution," Mr. Spitler said in an e-mail. "MTBE
has not been used for seven years, clean-up successfully continues
and the myriad of data shows MTBE detections decreasing."
Attorneys for the city praised the ruling.
"We knew that the city's legal case was very strong from the
beginning and that ExxonMobil should be made to pay for the high
clean-up cost its actions imposed on the city," said Michael
Cardozo, Corporation Counsel for New York City, in a press
release.
Susan Amron, head of the city law department's environmental
division, oversaw the case for the city.
"We are pleased that we were able to assist the city in upholding
its landmark verdict against a company that committed a series of
tortious acts in manufacturing and distributing gasoline
containing an ingredient that it knew could cause widespread
pollution of groundwater," said Paul Smith -- psmith@jenner.com --
a partner at Jenner & Block who argued the appeal for the city, in
the press release.
The release also included a statement from Mayor Michael
Bloomberg, who called the ruling "a warning to any company whose
actions threaten New Yorkers' health and quality of life."
Exxon and other gas companies used MTBE as an additive in gasoline
in the New York area beginning in the 1980s. MTBE increased the
oxygen content of gasoline, allowing it to burn more cleanly and
reduce emissions. Congress identified MTBE as a possible way for
gasoline companies to comply with the Clean Air Act in 1990.
However, MTBE-treated gasoline sometimes leaked from underground
tanks into groundwater, giving it an unpleasant taste, even in
very low concentrations. MTBE has also been found to cause cancer
in animals, and may also cause cancer in humans. In 2004, New
York banned the use of MTBE in gasoline. The most commonly used
oxygenating agent in gasoline is now ethanol.
The city sued Exxon and other defendants in 2003 over the
contamination of a system of wells in Jamaica, Queens known as the
Station Six Wells. The wells are not currently being used for
drinking water, but the city has expressed plans to remove MTBE
from the contaminated water so that they could be used in the
future. The city sought compensatory damages for all the costs it
has occurred and will incur for monitoring and cleaning up MTBE at
the site.
Other defendants sued by the city over MTBE, including Shell, BP,
Chevron, Citgo, Hess and Sunoco, settled before trial.
The city sought $300 million in compensatory damages from Exxon.
It also sought punitive damages, arguing that Exxon had recklessly
disregarded evidence of the dangers of MTBE and concealed it from
gas station owners.
The jury ultimately found that Exxon was only liable for $104.69
million. Exxon moved to bar the jury from considering punitive
damages on the grounds that the city had not shown the requisite
malice, recklessness or wantonness, and Judge Scheindlin granted
that motion.
On appeal, Exxon argued that the verdict must be overturned
because the Clean Air Act preempted the city's claims. It said
that the Clean Air Act required it to add oxygenating agents to
its gasoline, and MTBE was the only feasible agent available.
The Second Circuit panel rejected that argument. Judge Carney
wrote that even if using MTBE was the only way to comply with the
Clean Air Act, the jury's verdict included "additional tortious
conduct, such as failing to exercise ordinary care in preventing
and cleaning up gasoline spills."
Exxon also argued that the verdict should be thrown out because
Judge Scheindlin improperly handled a dispute between jurors. One
juror, Juror Number 2, complained that Juror Number 1 insulted her
and threatened to "cut" her. After interviewing the jurors,
Judge Scheindlin determined that Juror Number 2 was the only
juror who felt threatened by Juror Number 1, and dismissed Juror
Number 2. Exxon said that she should have dismissed Juror Number 1
instead. Judge Carney, however, wrote that there was no reason to
"second-guess" the way Judge Scheindlin handled the situation.
The city also cross-appealed Judge Scheindlin's decision not to
allow punitive damages. The Second Circuit affirmed Judge
Scheindlin as well, writing that the city had not shown that Exxon
acted recklessly because "there is no evidence demonstrating that
Exxon understood precisely how MTBE contamination at spill sites
. . . would affect groundwater located some distance away from
those sites."
FACEBOOK INC: Beacon Program Class Action Settlement Challenged
---------------------------------------------------------------
Wendy Davis, writing for The Daily Online Examiner, reports that
it's been nearly six years since Facebook's first foray into
social advertising: the disastrous 2007 Beacon program. The
company has made significant revisions to all of its services
since then, but the legal fallout from Beacon hasn't ended yet.
In fact, the next stop could be the Supreme Court, if some critics
of Facebook get their way.
The Beacon program infamously shared information about Facebook
users' ecommerce activity at outside sites -- like Zappos and
Overstock -- with their friends. The program, which was launched
on an opt-out basis, blindsided many users. That's more than
understandable, given that ecommerce sites had always kept
purchase information confidential in the past.
A group of users brought a class-action lawsuit against Facebook,
which eventually agreed to pay $9.5 million to resolve the case.
But the settlement itself is so problematic that litigation about
it is still underway. In the latest development, on July 26 a
user represented by the Center for Class Action Fairness (and the
law firm Baker Hostetler) asked the Supreme Court to consider
whether the settlement should stand.
The settlement calls for Facebook to pay around $6.5 million to
create a new privacy organization, the Digital Trust Foundation.
The foundation will be directed by a three-person board -- and
Facebook will play a key role in selecting those people. (One of
the board members was supposed to be Facebook's former public
policy director, Tim Sparapani, but he left the company before the
foundation was created.) The lawyers who brought the case on
behalf of the consumers -- including New York attorney Scott
Kamber and Texas lawyer Joseph Malley -- stand to receive around
$2.3 million.
The terms didn't sit well with everyone. Some critics went to
court and asked that the deal be rejected, arguing that Facebook
shouldn't be able to resolve a lawsuit by creating a new
nonprofit, which it will largely control.
Despite the objections, U.S. District Court Judge Richard Seeborg
in the Northern District of California approved the settlement.
Critics appealed to the 9th Circuit, which also gave the go-ahead
-- though over the dissent of Senior Circuit Judge Andrew
Kleinfeld. He wrote that the deal "perverts the class action into
a device for depriving victims of remedies for wrongs, while
enriching both the wrongdoers and the lawyers purporting to
represent the class."
The Center for Class Action Fairness makes those points in its
petition to the Supreme Court. "A $9.5 million class action
settlement that awards absentee class members no relief at all --
no money, no guarantee that defendants will not injure them in the
exact same manner, not even coupons -- is not 'fair, reasonable,
and adequate' by any measure," the group argues. "Yet the Ninth
Circuit upheld such a settlement of class members' claims because
class counsel and the lead defendant agreed to use $6.5 million to
establish a new foundation, controlled by the defendant and class
counsel, that also does nothing to combat defendants' alleged
conduct or redress class members' alleged injuries."
The Supreme Court rejects the vast majority of petitions for
review, but it's always possible that the court will agree to hear
the case. Either way, Facebook, and its lawyers, must now once
again spend time, energy and money coping with the fallout of the
Beacon privacy snafu.
FAMILY DOLLAR: Awaits Appellate Ruling in Gender Bias Action
------------------------------------------------------------
Family Dollar Stores, Inc., is awaiting a court decision in an
appeal from the denial of class certification in the class action
lawsuit alleging discriminatory pay practices, according to the
Company's July 10, 2013, Form 10-Q filing with the U.S. Securities
and Exchange Commission for the quarter ended June 1, 2013.
On October 14, 2008, a complaint was filed in the U.S. District
Court in Birmingham, Alabama, captioned Scott, et al. v. Family
Dollar Stores, Inc., alleging discriminatory pay practices with
respect to the Company's female store managers. This case was
pled as a putative class action or collective action under
applicable statutes on behalf of all current and former female
store managers. The plaintiffs seek recovery of back pay,
compensatory and punitive damages, recovery of attorneys' fees and
equitable relief. The case was transferred to the N.C. Federal
Court. On January 13, 2012, the N.C. Federal Court denied class
certification. The plaintiffs appealed this decision to the
Fourth Circuit. Oral arguments took place on May 14, 2013.
At this time, it is not possible to predict whether the Fourth
Circuit will affirm the N.C. Federal Court's decision to deny
class certification. Although the Company intends to vigorously
defend the action, no assurances can be given that the Company
will be successful in the defense on the merits or otherwise. For
these reasons, the Company is unable to estimate any potential
loss or range of loss. The Company has tendered the matter to its
Employment Practices Liability Insurance ("EPLI") carrier for
coverage under its EPLI policy. At this time, the Company expects
that the EPLI carrier will participate in any potential resolution
of some or all of the plaintiffs' claims.
Headquartered in Charlotte, North Carolina, Family Dollar Stores,
Inc. operates a chain of more than 7,800 general merchandise
retail discount stores in 45 states, providing consumers with a
selection of competitively priced merchandise in convenient
neighborhood stores. The Company's merchandise assortment
includes Consumables, Home Products, Apparel and Accessories, and
Seasonal and Electronics. The Company sells merchandise at prices
that generally range from less than $1 to $10.
FAMILY DOLLAR: Continues to Defend Wage and Hour Class Suits
------------------------------------------------------------
Family Dollar Stores, Inc. continues to defend itself against
lawsuits alleging violations of wage and hour laws, according to
the Company's July 10, 2013, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended June 1,
2013.
Since 2004, certain individuals who held the position of store
manager for the Company have filed lawsuits alleging that the
Company violated the Fair Labor Standards Act ("FLSA"), and/or
similar state laws, by classifying them as "exempt" employees who
are not entitled to overtime compensation. Certain plaintiffs
have also sought to proceed as collective actions under the FLSA
or as class actions under state laws. The Plaintiffs seek
recovery of overtime pay, liquidated damages, attorneys' fees and
court costs.
The Multi-District Litigation
Many of the cases asserting claims under the FLSA were
consolidated in a Multi-District Litigation ("MDL") proceeding
pending in the Western District of North Carolina, Charlotte
Division (the "N.C. Federal Court"). There are presently eleven
cases in the MDL proceeding in which plaintiffs are asserting
individual, class and/or collective action status. In total,
following certain dismissals and summary dispositions, 32
individually named plaintiffs currently have cases pending in the
MDL proceeding.
In two of the cases, Grace v. Family Dollar Stores, Inc. and Ward
v. Family Dollar Stores, Inc., the N.C. Federal Court determined
that the plaintiffs were not similarly situated and, therefore,
that neither nationwide notice nor collective treatment under the
FLSA was appropriate. The N.C. Federal Court also granted summary
judgment against Irene Grace on the merits of her
misclassification claim under the FLSA. The plaintiffs appealed
certain rulings of the N.C. Federal Court to the United States
Court of Appeals for the Fourth Circuit (the "Fourth Circuit").
On March 22, 2011, the Fourth Circuit affirmed the N.C. Federal
Court's decision finding that Ms. Grace was exempt from overtime
compensation under the FLSA. The Fourth Circuit did not address
class certification, finding the issue was moot given that the
claims had been dismissed on the merits.
In addition to the Grace decision, the N.C. Federal Court has
repeatedly ruled in favor of the Company and has granted summary
judgment against 41 of the plaintiffs, finding that the plaintiffs
were properly classified as exempt from overtime pay. Thirty-
eight individuals have filed notices of appeal of these dismissals
to the Fourth Circuit. The parties have preliminarily resolved
all of the cases that were appealed and the potential settlement
amount is not material.
The N.C. Federal Court dismissed all of the putative class action
cases in the MDL that were based solely on state law, and
transferred them to the appropriate state jurisdiction.
State Law Class Actions
The Company is currently a defendant in six class action lawsuits
alleging that store managers should be classified as non-exempt
employees under various state laws. During the first three
quarters of fiscal 2013, two of the state cases listed
(Connecticut and Kentucky) were denied class certification or
settled. The plaintiffs in these cases seek recovery of overtime
pay, liquidated damages, attorneys' fees and court costs. The
states and cases are:
* Colorado - Julie Farley v. Family Dollar Stores of Colorado,
Inc., was filed on February 7, 2012, in the United States
District Court for the District of Colorado seeking unpaid
overtime for a class of current and former Colorado store
managers whom plaintiffs claim are not properly classified
as exempt from overtime pay under Colorado law. The parties
have completed discovery. On February 11, 2013, the Court
granted the Company's motion to dismiss certain of the state
common law claims. On March 21, 2013, the Court granted
plaintiffs' motion for class certification. Notice is being
sent to the putative Colorado class.
* Connecticut - Cook, et al. v. Family Dollar Stores of
Connecticut, Inc., was filed on October 5, 2011, in the
Superior Court of the State of Connecticut seeking unpaid
overtime pay for a class of current and former Connecticut
store managers whom plaintiffs claim are not properly
classified as exempt from overtime under Connecticut law.
The plaintiffs filed a motion seeking class certification.
A hearing was held on the class certification motion on
January 7, 2013, and on March 18, 2013, the Court entered
its order denying plaintiff's motion for class certification.
* Kentucky - Barker v. Family Dollar, Inc., was filed on
February 17, 2010, in Circuit Court in Jefferson County,
Kentucky seeking unpaid overtime, compensation for unpaid
breaks and for seventh day work under Kentucky law for a
class of current and former Kentucky store managers. The
Company removed this matter to the United States District
Court for the Western District of Kentucky. The parties
filed cross-motions for summary judgment. On October 25,
2012, the district court granted the Company's motion for
summary judgment and denied the plaintiffs' motion. On
November 26, 2012, the plaintiffs filed a notice of appeal
to the Sixth Circuit Court of Appeals. The parties have
resolved the case and the settlement amount paid was not
material.
* Massachusetts - Premo v. Family Dollar Stores of Mass, Inc.
was filed in the Worcester County Massachusetts Superior
Court on April 26, 2013, seeking unpaid overtime for a class
of current and former Massachusetts store managers. Family
Dollar removed the matter to United States District Court
for Massachusetts on May 28, 2013. The Company filed an
answer denying all liability on June 4, 2013.
* Missouri - Twila Walters et. al. v. Family Dollar Stores of
Missouri, Inc., was filed on January 26, 2010, seeking unpaid
overtime for a class of current and former Missouri store
managers who presently reside in Missouri and whom
plaintiffs claim are not properly classified as exempt from
overtime under Missouri law. This matter is pending in the
Circuit Court of Jackson County, Missouri (the "Jackson
County Circuit Court"). On May 10, 2011, the Jackson County
Circuit Court certified the class under Missouri law. The
parties are engaged in merits discovery. The trial is set
to begin in November 2013. The parties are currently
engaged in a mediation process.
* New Jersey - Hegab v. Family Dollar Stores, Inc., was filed
in the United States District Court for the District of New
Jersey on March 3, 2011, seeking unpaid overtime pay for a
class of current and former New Jersey store managers whom
plaintiffs claim are not properly classified as exempt from
overtime pay under New Jersey law. This matter has been
administratively dismissed by the district court.
* New York - Youngblood, et al. v. Family Dollar Stores of New
York, Inc. et al., was filed in the United States District
Court for the Southern District of New York on April 2,
2009. Rancharan v. Family Dollar Stores, Inc., was filed in
the Supreme Court of the State of New York, Queens County on
March 4, 2009. Rancharan was removed to the United States
District Court for the Eastern District of New York on
May 6, 2009, and was transferred to the Southern District of
New York where the case has been consolidated with
Youngblood. The parties reached agreement to resolve this
matter for a maximum payment of $14 million. The Court
entered final approval of the settlement agreement on
June 10, 2013. The Company believes the liability recorded
associated with this action is appropriate based on the
payout under the settlement agreement.
* Pennsylvania - Itterly v. Family Dollar Stores, Inc., which
was formerly pending in the N.C. Federal Court, was remanded
back to the United States District Court for the Eastern
District of Pennsylvania on February 8, 2012. In Itterly,
plaintiffs are seeking unpaid overtime for a class of
current and former Pennsylvania store managers whom
plaintiffs claim are not properly classified as exempt from
overtime pay under Pennsylvania law. Discovery closed in
June 2012. The Company has filed a motion for summary
judgment seeking dismissal of Itterly's claims in their
entirety, which is pending before the court.
In general, the Company continues to believe that its store
managers relevant to this litigation are "exempt" employees under
the FLSA and have been and are being properly compensated under
both federal and state laws. The Company further believes that
these actions are not appropriate for collective or class action
treatment. The Company intends to vigorously defend the claims in
these actions. No assurances can be given that the Company will
be successful in the defense of these actions, on the merits or
otherwise. The Company cannot reasonably estimate the possible
loss or range of loss that may result from these actions with
exception of the settlement of the Rancharan/Youngblood case.
Headquartered in Charlotte, North Carolina, Family Dollar Stores,
Inc. operates a chain of more than 7,800 general merchandise
retail discount stores in 45 states, providing consumers with a
selection of competitively priced merchandise in convenient
neighborhood stores. The Company's merchandise assortment
includes Consumables, Home Products, Apparel and Accessories, and
Seasonal and Electronics. The Company sells merchandise at prices
that generally range from less than $1 to $10.
FAMILY DOLLAR: "Pipefitters" Suit Voluntarily Dismissed in June
---------------------------------------------------------------
Family Dollar Stores, Inc., disclosed in its July 10, 2013, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended June 1, 2013, that the class action lawsuit
initiated by the Pipefitters Local No 636 Defined Benefit Pension
Fund was voluntarily dismissed in June 2013.
The Company and three of its officers are defendants in the case
Pipefitters Local No 636 Defined Benefit Pension Fund,
Individually and on Behalf of All Others Similarly Situated v.
Family Dollar Stores, Inc., Howard R. Levine, Mary A. Winston and
Michael Bloom, which was filed on February 21, 2013, in the United
States District Court for the Western District of North Carolina.
On June 24, 2013, the plaintiff voluntarily dismissed the
complaint, and as a result, the case is now concluded. The
Company made no payments to the plaintiff.
Headquartered in Charlotte, North Carolina, Family Dollar Stores,
Inc. operates a chain of more than 7,800 general merchandise
retail discount stores in 45 states, providing consumers with a
selection of competitively priced merchandise in convenient
neighborhood stores. The Company's merchandise assortment
includes Consumables, Home Products, Apparel and Accessories, and
Seasonal and Electronics. The Company sells merchandise at prices
that generally range from less than $1 to $10.
FAMILY MANAGEMENT: 2nd Cir. Affirms Judgment in "Newman" Suit
-------------------------------------------------------------
The United States Court of Appeals for the Second Circuit issued a
summary order affirming a district court judgment in NEWMAN v.
FAMILY MANAGEMENT CORPORATION.
Plaintiffs-Appellants David B. Newman and IRA FBO David Newman-
Pershing LLC appealed the district court's October 20, 2010
decision granting the Defendants-Appellees' motions to dismiss
Plaintiffs' putative class action complaint in its entirety, and
the district court's February 2, 2011 decision denying Plaintiffs'
motion to amend the judgment under Federal Rule of Civil Procedure
59(e) and denying Plaintiffs' Rule 15(a) motion for leave to amend
the complaint.
The Plaintiffs assert that the district court erred in dismissing
its federal securities fraud and New York common law fraud claims
against Family Management Corporation and its alleged control
persons Seymour Zises and Andrea Tessler, arguing that the
complaint's allegations are sufficient to plead a violation of
Section 10(b) of the Securities Exchange Act of 1934.
The Second Circuit disagreed saying factual allegations do not
state a valid claim for securities fraud or New York common law
fraud.
The case is DAVID B. NEWMAN and IRA F/B/O DAVID NEWMAN-PERSHING
LLC as Custodian, on behalf of themselves and all Others Similarly
Situated, and Derivatively on behalf of FM LOW VOLATILITY FUND,
L.P., Plaintiffs-Appellants, v. FAMILY MANAGEMENT CORPORATION;
SEYMOUR W. ZISES; ANDREA L. TESSLER; ANDOVER ASSOCIATES LLC I;
BEACON ASSOCIATES LLC I; MAXAM CAPITAL MANAGEMENT LLC; MAXAM
CAPITAL GP, LLC; MAXAM CAPITAL MANAGEMENT LIMITED; SANDRA MANZKE;
and JOHN DOES 1-100, MAXAM ABSOLUTE RETURN FUND, LP, Defendants-
Appellees, FM LOW VOLATILITY FUND, L.P., Nominal Defendant-
Appellee, ANDOVER ASSOCIATES MANAGEMENT CORP.; BEACON ASSOCIATES
MANAGEMENT CORP.; FULVIO & ASSOCIATES, LLP, JOEL DANZIGER; HARRIS
MARKHOFF; IVY ASSET MANAGEMENT CORP.; and THE BANK OF NEW YORK
MELLON CORPORATION, Defendants, NO. 11-622-CV.
A copy of the Circuit Court's July 16, 2013 Summary Order is
available at http://is.gd/Dl0Ixt from Leagle.com.
DANIEL W. KRASNER -- krasner@whafh.com -- at Wolf Haldenstein
Adler Freeman & Herz LLP, New York, NY., for Appellants.
NEIL A. STEINER -- neil.steiner@dechert.com -- (Andrew J. Levander
-- andrew.levander@dechert.com -- on the brief) at Dechert, LLP,
New York, NY., for Appellees, Family Management Corp.; Seymour W.
Zises; Andrea L. Tessler.
KIMBERLY PERROTTA COLE -- kimberly.cole@kobrekim.com -- (Jonathan
D. Cogan -- jonathan.cogan@kobrekim.com -- Carrie A. Tendler --
carrie.tendler@kobrekim.com -- Michael S. Kim --
michael.kim@kobrekim.com -- on the brief), at Kobre & Kim LLP, New
York, NY., for Appellees, MAXAM Capital Management LLC; MAXAM
Capital GP, LLC; MAXAM Capital Management Ltd.; Sandra Manke.
BARRY R. LAX -- blax@laxneville.com -- (Gabrielle J. Pretto --
gpretto@laxneville.com -- on the brief), at Lax & Neville LLP, New
York, NY, for Appellee, FM Low Volatility Fund, L.P.
JAMES N. LAWLOR -- jlawlor@wmd-law.com -- at Wollmuth Maher &
Deutsch LLP, Newark, NJ, for Appellee, MAXAM Asbolute Return Fund.
FRESNO RETIREMENT BOARD: Judgment in "Chisom" Suit Upheld
---------------------------------------------------------
The Court of Appeals of California for the Fifth District affirmed
a trial court judgment in GERALDINE CHISOM et al., Plaintiffs and
Appellants, v. BOARD OF RETIREMENT OF COUNTY OF FRESNO EMPLOYEES'
RETIREMENT ASSOCIATION et al., Defendants and Respondents, No.
F064259.
The Appellants are retired public employees and members of the
Fresno County Employees' Retirement Association (FCERA). From
2001 to 2009, if a member of FCERA qualified for a non-service-
connected disability retirement, the amount of his or her monthly
retirement allowance was calculated based on an "enhanced"
benefits formula that exceeded the formula provided in the
statutes governing such matters as found in the County Employees
Retirement Law of 1937 (Gov. Code, Section 31450 et seq. (CERL)).
The rationale for using the enhanced benefits formula was an
interoffice letter by the chief deputy county counsel stating
that, in his opinion, a 2000 settlement agreement, which resolved
certain claims against the County of Fresno, FCERA, and others,
relating to retirement benefits, was intended to include an
enhancement of disability retirement benefits. The letter advised
that disability retirement allowances should be increased
according to a formula attached to the letter. FCERA followed that
advice, even though the settlement agreement had enhanced only
"service" retirement benefits and was silent as to disability
retirement benefits.
In 2009, the governing board of FCERA, known as the board of
retirement, reexamined the issue and concluded that it had been
erroneously using the enhanced benefits formula to calculate non-
service-connected disability retirement, and it voted to
discontinue that practice. Appellants then filed the present
action against the Board, FCERA, the County, and other plan
sponsors, to require them to resume the use of the enhanced
benefits formula. Respondents demurred. After allowing several
opportunities to amend, the trial court sustained respondents'
demurrer to the appellants' third amended petition without leave
to amend on the ground that, as a matter of law, the settlement
agreement did not include the enhanced benefits formula for
disability retirement. Appellants appealed from the resulting
judgment, arguing that under the recent Supreme Court case of
Retired Employees Assn. of Orange County, Inc. v. County of Orange
(2011) 52 Cal.4th 1171 (Retired Employees), the enhanced benefits
formula for disability retirement was arguably an implied term of
the settlement agreement.
The Calif. Appeals Court disagreed, and affirmed the judgment of
the trial court saying the trial court correctly held that
appellants could not state a cause of action premised on an
implied grant of other (i.e., disability retirement) enhancements.
"Were we to hold otherwise, it would violate a fundamental rule of
contract law that an implied term may not be found where it would
contradict the express terms of the contract. (See Malmstrom v.
Kaiser Aluminum & Chemical Corp. (1986) 187 Cal.App.3d 299, 316;
Anderson v. Savin Corp. (1988) 206 Cal.App.3d 356, 364.) Moreover,
for purposes of a demurrer, a court is not required to accept as
true a plaintiff's allegations of contractual terms where, in
light of the written agreement attached to the pleading, such
allegations would place a "clearly erroneous construction upon the
provisions" of the attached agreement. (Marina Tenants Assn. v.
Deauville Marina Development Co. (1986) 181 Cal.App.3d 122, 128.)
That is precisely the case here, since for the reasons noted
above, the settlement agreement cannot be reasonably interpreted
to include the implied provision for enhanced disability
retirement benefits," according to the Calif. Appeals Court.
A copy of the Appeals Court's July 16, 2013 Opinion is available
at http://is.gd/8eEFM1from Leagle.com.
Thomas J. Tusan and Russell D. Cook -- rdcook@rdcooklaw.com -- for
Plaintiffs and Appellants.
Reed Smith, Harvey L. Leiderman -- hleiderman@reedsmith.com -- and
Jeffrey R. Rieger -- jrieger@reedsmith.com -- for Defendants and
Respondents Board of Retirement of County of Fresno Employees'
Retirement Association and Fresno County Employees' Retirement
Association.
Lozano Smith, Gregory A. Wedner -- gwedner@lozanosmith.com -- and
Scott G. Cross -- scross@lozanosmith.com -- for Defendants and
Respondents County of Fresno, Clovis Veterans Memorial District,
Fresno Mosquito & Vector Control District and Superior Court of
California for the County of Fresno.
GENERAL MOTORS: Recalls 68 Sierra and Silverado Models
------------------------------------------------------
Starting date: July 18, 2013
Type of communication: Recall
Subcategory: Light Truck & Van
Notification type: Safety Mfr
System: Airbag
Units affected: 68
Source of recall: Transport Canada
Identification number: 2013249
TC ID number: 2013249
Manufacturer recall number: 13230
Affected products:
Make Model Model year(s) affected
---- ----- ----------------------
GMC Sierra 2014
Chevrolet Silverado 2014
On certain Crew Cab vehicles, welds on the passenger airbag
inflator may fracture during airbag deployment, allowing some of
the gases to vent behind the instrument panel instead of into the
airbag. If this occurs, the airbag may not fully inflate.
Failure of the passenger airbag to fully deploy during a crash
(where deployment is warranted) could increase the risk of
personal injury to the seat occupant.
Dealers will replace the passenger frontal airbag assembly.
GEORGIA-PACIFIC CONSUMER: Appeals Ct. Upholds Class Certification
-----------------------------------------------------------------
Four Effingham County property owners sued Georgia-Pacific
Consumer Products, LP for nuisance, trespass, and negligence
arising out of the intermittent but continuing release of hydrogen
sulfide gas onto their properties from Georgia-Pacific's Savannah
River Mill in Rincon. The plaintiffs moved the trial court to
certify a class consisting of the owners of 65 additional
properties neighboring the plant. After a hearing, the trial court
certified the class pursuant to OCGA Section 9-11-23 (c) (1).
Georgia-Pacific contends that the trial court abused its
discretion when it certified the class.
The Court of Appeals of Georgia disagreed with Georgia-Pacific and
affirmed the class certification saying that the trial court's
reasoning given the facts of the case are reasonable and supported
by competent evidence. Thus, the Georgia Appeals Court finds no
abuse of discretion in the trial court's decision to certify the
class.
Judge Branch dissented saying that the trial court erred when it
certified the class because the plaintiffs have failed to
demonstrate, as they are required to do by OCGA Sections 9-11-23
(b) (3), that a class action is superior to traditional means of
adjudicating their claims.
The case is GEORGIA-PACIFIC CONSUMER PRODUCTS, LP v. RATNER et
al., A13A0455.
A copy of the Appeals Court's July 16, 2013 Decision is available
at http://is.gd/QE7AlBfrom Leagle.com.
GLAXOSMITHKLINE PLC: Settles U.S. Avandia Suits for $229 Million
----------------------------------------------------------------
Peter Loftus, writing for Dow Jones Newswires, reports that
GlaxoSmithKline PLC has agreed to pay $229 million to settle
lawsuits in which several U.S. states accused the drug maker of
deceptively marketing the diabetes treatment Avandia.
The lawsuits generally alleged the U.K. company misrepresented the
safety and efficacy of the drug, which has been linked to
increased risk for heart attacks and strokes. The company didn't
admit to any wrongdoing or liability under state laws in the
settlements.
Glaxo is settling the state Avandia matters to avoid the expense
and uncertainty of protracted litigation and trial, a company
spokeswoman said on July 24. The cost of the settlements will be
covered by existing provisions, she said.
The company reached the settlements in principle with the
attorneys general of eight states: Kentucky, Louisiana, Maryland,
Mississippi, New Mexico, South Carolina, Utah and West Virginia.
The settlements also resolve allegations related to other Glaxo
products brought by the Louisiana attorney general, Glaxo said.
The states had opted out of a 2012 settlement in which Glaxo
agreed to pay $90 million to settle Avandia-related consumer-
protection claims by 37 other states and the District of Columbia.
Some U.S. states have taken a more aggressive stance in accusing
drug makers of deceptive marketing, partly by deploying consumer-
protection laws that have traditionally been used to go after
abusive debt collectors or fraudulent car dealers.
The state-related Avandia settlements follow Glaxo's more costly
resolution of a federal probe. Glaxo last year pleaded guilty in
federal court to failing to submit certain clinical-trial
information about Avandia to the Food and Drug Administration, as
part of a $3 billion settlement that also resolved federal
investigations of the marketing of other Glaxo drugs.
Glaxo believes it acted responsibly in conducting the clinical
trial program and marketing of Avandia, in monitoring the drug's
safety and updating the drug's prescribing label as new
information became available, the spokeswoman said.
JEFFERIES GROUP: Del. Merger-Related Suits Go On; NY Suits Stayed
-----------------------------------------------------------------
The merger-related class action lawsuits filed in New York have
been stayed, and the actions filed in Delaware are proceeding,
according to Jefferies Group LLC's July 10, 2013, Form 10-Q filing
with the U.S. Securities and Exchange Commission for the quarter
ended May 31, 2013.
On March 1, 2013, Jefferies Group LLC, formerly known as Jefferies
Group, Inc., through a series of merger transactions, became a
wholly owned subsidiary of Leucadia National Corporation. The
outstanding shares of Jefferies Group LLC were converted into 0.81
shares of Leucadia common stock.
Seven putative class action lawsuits have been filed in New York
and Delaware concerning the merger transactions whereby Jefferies
Group LLC became a wholly owned subsidiary of Leucadia. The class
actions, filed on behalf of the Company's shareholders prior to
the merger transactions, name as defendants Jefferies Group, Inc.,
the members of the board of directors of Jefferies Group, Inc.,
Leucadia and, in certain of the actions, certain merger-related
subsidiaries. The actions allege that the directors breached
their fiduciary duties in connection with the merger transactions
by engaging in a flawed process and agreeing to sell Jefferies
Group, Inc. for inadequate consideration pursuant to an agreement
that contains improper deal protection terms. The actions allege
that Jefferies Group, Inc. and Leucadia aided and abetted the
directors' breach of fiduciary duties. The actions filed in New
York have been stayed, and the actions filed in Delaware are
proceeding.
The Company says it is unable to predict the outcome of this
litigation or to estimate the amount of or range of any reasonably
possible loss.
New York-based Jefferies Group LLC, formerly known as Jefferies
Group, Inc., operates in two business segments: Capital Markets
and Asset Management. Capital Markets includes the Company's
securities, commodities, futures and foreign exchange trading and
investment banking activities, which provides the research, sales,
trading and origination effort for various equity, fixed income
and advisory products and services. Asset Management provides
investment management services to various private investment
funds, separate accounts and mutual funds.
KB HOME: Continues to Defend Remaining Suit Over Chinese Drywall
----------------------------------------------------------------
KB Home continues to defend the remaining lawsuit relating to
defective drywall manufactured in China, according to the
Company's July 10, 2013, Form 10-Q filing with the U.S. Securities
and Exchange Commission for the quarter ended May 31, 2013.
As of May 31, 2013, the Company was a defendant in eight lawsuits
relating to allegedly defective drywall manufactured in China.
Seven of the lawsuits are "omnibus" class actions purportedly
filed on behalf of numerous homeowners asserting claims for
damages against drywall manufacturers, homebuilders and other
parties in the supply chain of the allegedly defective drywall
material. The Company is also a defendant in one lawsuit brought
in Florida state court by individual homeowners. On February 7,
2013, a final global settlement of claims relating to the
allegedly defective drywall material, including the seven omnibus
class actions in which the Company was named as a defendant, was
approved by the federal court judge overseeing a multidistrict
litigation case -- In re: Chinese Manufactured Drywall Products
Liability Litigation (MDL-2047). Except as noted, the global
settlement resolved all current claims against the Company,
including the seven omnibus class actions in which the Company was
named as a defendant, and bars any future claims against all
participating defendants, including the Company. The Company's
total obligation as a participating defendant under the global
settlement was $.3 million, which the Company paid on March 25,
2013. The Company also expects to receive certain amounts under
the global settlement in 2013 based on repairs the Company made to
homes of certain settlement class members.
The plaintiffs in the Florida state court case opted out of the
global settlement, and the Company will defend that case. While
the ultimate outcome of that case is uncertain, based on the
current status of the proceedings, the Company does not believe
the outcome will be material to its consolidated financial
statements.
KB Home is a Delaware corporation headquartered in Los Angeles,
California. The Company has five reporting segments, comprised of
four homebuilding segments and one financial services segment.
The Company's homebuilding reporting segments are engaged in the
acquisition and development of land primarily for residential
purposes and offer a wide variety of homes that are designed to
appeal to first-time, first move-up and active adult homebuyers.
The Company's financial services reporting segment offers
insurance services to its homebuyers in the same markets as its
homebuilding reporting segments and provides title services in the
majority of its markets.
KOHL'S CORP: Faces Securities Suit Over Misstated Financials
------------------------------------------------------------
City of Sterling Heights Police & Fire Retirement System,
Individually and on Behalf of All Others Similarly Situated v.
Kohl's Corporation, Kevin Mansell and Wesley S. McDonald, Case No.
1:13-cv-05158-JSR (S.D. N.Y., July 24, 2013) is a securities class
action on behalf of purchasers of the common stock of Kohl's
between February 26, 2009, and September 13, 2011, inclusive,
seeking to pursue remedies under the Securities Exchange Act of
1934.
After the end of its October 30, 2010 quarter, the Company
represented that it had identified various errors in its
accounting for its leased properties and that it had completed a
detailed review of each of its leases, the Plaintiff states. The
Plaintiff says that Kohl's also reported that corrections of the
noted errors were not material to its previously reported
financial statements, so they have been recorded as a correction
of an error during the current quarter. In truth, however, the
Plaintiff alleges that Kohl's accounting for and reporting of its
leases was materially misstated. The Plaintiff adds that Kohl's
improper lease accounting during the Class Period caused its
reported debt to be materially understated and its reported equity
to be materially overstated, and as a result, its leverage ratios,
including its debt to equity ratio, were also materially
understated.
City of Sterling Heights Police & Fire Retirement System purchased
the common stock of Kohl's during the Class Period and has been
damaged thereby.
Kohl's operates department stores across the U.S. that sell
moderately priced apparel and home fashions that are targeted to
middle-income consumers. Kevin Mansell served as president, chief
executive officer and a director of Kohl's. Wesley S. McDonald
served as executive vice president and chief financial officer of
Kohl's.
The Plaintiff is represented by:
Samuel Howard Rudman, Esq.
ROBBINS GELLER RUDMAN & DOWD LLP
58 South Service Road, Suite 200
Melville, NY 11747
Telephone: (631) 367-7100
Facsimile: (631) 367-1173
E-mail: srudman@rgrdlaw.com
- and -
Thomas C. Michaud, Esq.
VANOVERBEKE, MICHAUD & TIMMONY, P.C.
79 Alfred Street
Detroit, MI 48201
Telephone: (313) 578-1200
Facsimile: (313) 578-1201
E-mail: tmichaud@vmtlaw.com
LENNAR CORP: To Resolve Drywall Claims for 60 Homes in MDL Deal
---------------------------------------------------------------
As of May 31, 2013, Lennar Corporation has identified
approximately 1,010 homes delivered in Florida primarily during
its 2006 and 2007 fiscal years that are confirmed to have had
defective Chinese drywall and resulting damage. This represents a
small percentage of homes the Company delivered nationally (1.2%)
during those fiscal years. Defective Chinese drywall is an
industry-wide issue as other homebuilders have publicly disclosed
that they have experienced similar issues with defective Chinese
drywall. Based on its efforts to date, the Company has not
identified defective Chinese drywall in homes delivered by the
Company outside of Florida. The Company has offered to replace
defective Chinese drywall when it has been found in homes the
Company has built, and has done so in substantially all affected
homes.
Drywall claims for approximately 60 of the 1,010 homes will be
resolved through settlement of the drywall multi-district class
action litigation in the United States District Court for the
Eastern District of Louisiana, according to the Company's July 10,
2013, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended May 31, 2013.
Through May 31, 2013, the Company has accrued $82.2 million of
warranty reserves related to defective Chinese drywall. There
were no additional amounts accrued during the six months ended
May 31, 2013. As of May 31, 2013, and November 30, 2012, the
warranty reserve related to Chinese drywall, net of payments, was
$2.1 million and $2.9 million, respectively. The Company has
received, and continues to seek, reimbursement from its
subcontractors, insurers and others for costs the Company has
incurred or expects to incur to investigate and repair defective
Chinese drywall and resulting damage.
Miami, Florida-based Lennar Corporation -- http://www.lennar.com/
-- is one of the nation's largest homebuilders, a provider of
financial services and through its Rialto Investments segment, an
investor, and manager of funds that invest in real estate assets.
The Company's homebuilding operations include the construction and
sale of single-family attached and detached homes, as well as the
purchase, development and sale of residential land directly and
through unconsolidated entities in which the Company has
investments.
LOS ALTOS APARTMENTS: Class Cert. Denial in Tenants' Suit Upheld
----------------------------------------------------------------
The Court of Appeals of California, Second District, Division
Three, affirmed a trial court order denying class certification in
DAVID HENDLEMAN et al., Plaintiffs and Appellants, v. LOS ALTOS
APARTMENTS, L.P., et al., Defendants and Respondents, No. B235404.
David Hendleman and Anne Aaronson took an appeal from the order of
the trial court denying their motion for certification of a class
of tenants at the Los Altos Apartments in the context of their
lawsuit against the landlord. Plaintiffs brought this action
alleging the landlord failed to repair and maintain the property
in a safe and habitable condition over a period of 10 months,
unlawfully demanded increased rents, and retaliated against the
tenants for exercising their rights. The trial court denied
plaintiffs' motion for class certification for lack of
ascertainability, community of interest, and superiority. In
their appeal, plaintiffs contend that the class is ascertainable
and there are common issues of law and fact, with the result they
should be able to proceed as a class against defendants Los Altos
Apartments, L.P., Charles and Cynthia Eberly, Inc., Allen Gross,
Charles Eberly and David Strahm who are owners, managers, or
representatives of the apartment building. To the extent problems
of ascertainability or commonality exist, they argue, the class
can be modified.
The California Appeals Court concluded that the trial court's
reasoning was correct and it did not use improper criteria or
erroneous legal assumptions. The trial court also did not abuse
its discretion in denying certification of all five of plaintiffs'
causes of action on the basis that individual issues predominate.
A copy of the Appeals Court's July 22, 2013 Opinion is available
at http://is.gd/0hALUufrom Leagle.com.
Law Office of Sheri L. Kelly, Sheri L. Kelly --
slk@sherikellylaw.com ; Consumer Law Offices and Daniel T. LeBel
-- danlebel@consumerlawpractice.com -- for Plaintiffs and
Appellants.
Willis Depasquale, James M. Hansen -- jhansen@wdlegal.net -- Larry
N. Willis -- lwillis@wdlegal.net -- and Thomas M. Rutherford, Jr.
-- trutherford@wdlegal.net -- for Defendants and Respondents.
MAGNUM HUNTER: Defends Securities Suits in New York and Texas
-------------------------------------------------------------
Magnum Hunter Resources Corporation is defending itself against
securities class action lawsuits in New York and Texas, according
to the Company's July 9, 2013, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended March 31,
2013.
On April 23, 2013, Anthony Rosian, individually and on behalf of
all other persons similarly situated, filed a class action
complaint in the United States District Court, Southern District
of New York, against the Company and certain of its officers, two
of whom also serve as directors. On April 24, 2013, Horace
Carvalho, individually and on behalf of all other persons
similarly situated, filed a similar class action complaint in the
United States District Court, Southern District of Texas, against
the Company and certain of its officers, two of whom also serve as
directors. Several substantially similar putative class actions
have been filed in the Southern District of New York and in the
Southern District of Texas. All such cases are collectively
referred to as the Securities Cases. The complaints in the
Securities Cases allege that the Company made certain false or
misleading statements in its filings with the SEC, including
statements related to the Company's internal and financial
controls, the calculation of non-cash share-based compensation
expense, the late filing of the Company's 2012 Form 10-K, the
dismissal of Magnum Hunter's previous independent registered
accounting firm, and other matters identified in the Company's
April 16, 2013 Form 8-K, as amended. The complaints demand that
the defendants pay unspecified damages to the class action
plaintiffs, including damages allegedly caused by the decline in
the Company's stock price between February 22, 2013, and April 22,
2013. The Company and the individual defendants intend to
vigorously defend the Securities Cases. It is possible that
additional putative class action lawsuits could be filed over
these events.
Based in Houston, Texas, Magnum Hunter Resources Corporation --
http://www.magnumhunterresources.com/-- is an independent oil and
gas company engaged in the exploration for and the exploitation,
acquisition, development and production of crude oil, natural gas
and natural gas liquids resources in the United States and Canada.
The Company is also engaged in midstream and oil field services
operations, primarily in West Virginia, Ohio and Texas.
MARRIOTT HOTEL: Hawaii S.C. Answers Question on "Tipping" Issue
---------------------------------------------------------------
The Supreme Court of Hawaii issued an opinion in VILLON v.
MARRIOTT HOTEL SERVICES, INC., with respect to a question of law
certified by the United States District Court for the District of
Hawaii:
"May food or beverage service employees of a hotel or restaurant
bring a claim against their employer based on an alleged
violation of Haw. Rev. Stat. Section 481B-14 by invoking Haw.
Rev. Stat. Sections 388-6, 388-10, and 388-11 and without
invoking Haw. Rev. Stat. Sections 480-2 or 480-13?"
The Hawaii Supreme Court answered the certified question in the
affirmative and held that when a hotel or restaurant applying a
service charge for the sale of food or beverage services allegedly
violates HRS Section 481B-14 (2008) (1) by not distributing the
full service charge directly to its employees as "tip income" (in
other words, as "wages and tips of employees"), and (2) by failing
to disclose this practice to the purchaser of the services, the
employees may bring an action under HRS Sections 388-6 (1993), -10
(1993 & Supp. 1999), and -11 (1993 & Supp. 1999) to enforce the
employees' rights and seek remedies.
The case is BERT VILLON and MARK APANA, Plaintiffs, v. MARRIOTT
HOTEL SERVICES, INC., dba WAILEA MARRIOTT RESORT, Defendant.
RENELDO RODRIGUEZ and JOHNSON BASLER, on behalf of themselves and
all others similarly situated, Plaintiffs, v. STARWOOD HOTELS &
RESORTS WORLDWIDE, INC., dba WESTIN MAUI RESORT & SPA, Defendant,
NO. SCCQ-11-0000747.
A copy of the Supreme Court's July 15, 2013 Opinion is available
at http://is.gd/NaPppofrom Leagle.com.
Ashley Ikeda -- aikeda@unioncounsel.net -- & Lori K. Aquino --
laquino@unioncounsel.net -- at Weinberg, Roger & Rosenfeld Harold
Lichten -- HLichten@llrlaw.com -- & Shannon Liss-Riordan --
sliss@llrlaw.com -- Pro hac vice (at Lichten & Liss-Riordan, P.C.)
for plaintiffs.
Barry W. Marr -- bmarr@marrjones.com -- & Richard M. Rand --
rrand@marrjones.com -- at Marr Jones & Wang, for defendant
Marriott Hotel Services, dba Wailea Marriott Resort.
Paul Alston -- palston@ahfi.com -- Anna Elento-Sneed --
mcalvert@ahfi.com -- & Maren Calvert -- aes@ahfi.com -- at Alston
Hunt Floyd & Ing, for defendant Starwood Hotels & Resorts
Worldwide dba Westin Maui Resort & Spa.
MIRA HEALTH: FDA Warns Customers About Steroids in Supplement
-------------------------------------------------------------
The Associated Press reports that the Food and Drug Administration
is warning consumers to avoid a vitamin B dietary supplement from
Healthy Life Chemistry by Purity First because it contains two
potentially dangerous anabolic steroids.
The agency says the company's B-50 supplements tested positive for
methasterone and dimethazine, two steroids sometimes used
illegally by bodybuilders. Neither ingredient is listed on the
product's labeling.
Federal regulators have received 29 reports of side effects
connected with the product, including fatigue, muscle cramping and
pain. Some of the cases have resulted in hospitalization, but
there have been no reports of death or liver failure.
The product is manufactured by Mira Health Products Ltd. of
Farmingdale, N.Y. and sold online and in stores. The FDA says the
company has declined a government request to voluntarily recall
the product.
NEXANS CANADA: Recalls 102 14/2 NMD90 Heatex Cable
--------------------------------------------------
Starting date: July 29, 2013
Posting date: July 29, 2013
Type of communication: Consumer Product Recall
Subcategory: Tools and Electrical
Products
Source of recall: Health Canada
Issue: Product Safety, Labelling
and Packaging
Audience: General Public
Identification number: RA-34777
Affected Products: 14/2 NMD90 Heatex Cable
The recall involves 14/2 NMD90 Heatex(R) cable identified by part
number 99138. The cable has a red overall jacket with red and
black individual conductors. The product is supplied in 50 meter
lengths on metal spools. Pictures of the recalled products are
available at: http://is.gd/SMSpzc
The product is correctly manufactured and printed as 14/2 NMD90
Heatex and is safe to use as such; however, the product label on
the spool incorrectly describes the product as 12/2 NMD90 Heatex.
The product should not be used in an installation requiring 12/2
NMD90 Heatex. The potential exists for installing the product in
an improper application and possible overheating.
Neither Health Canada nor Nexans Canada Inc. has received any
reports of incidents or injuries related to the use of this cable
in Canada.
Approximately 102 spools of the recalled cable were sold at Rona
stores in Canada.
The recalled cable was manufactured in Canada and sold in October
2012.
Companies:
Manufacturer Nexans Canada Inc.
Markham
Ontario
Canada
Consumers should stop using the recalled cable immediately and
return the product to the place of purchase for a refund.
For more information, consumers may contact Nexans Canada Inc. by
telephone at 1-800-268-9473, and 1-800-263-2112 in Quebec, or by
mail at:
Nexans Canada Inc.
140 Allstate Parkway
Markham, Ontario L3R 0Z7
NEW YORK: Andrew Cuomo Sued by 3 Residents of Impacted Adult Homes
------------------------------------------------------------------
Raymond O'Toole, Ilona Spiegel, and Steven Farrell, individually
and on behalf of all others similarly situated v. Andrew M. Cuomo,
in his official capacity as Governor of the State of New York,
Nirav R. Shah, in his official capacity as Commission of the New
York State Department of Health, Kristin M. Woodlock, in her
official capacity as Acting Commissioner of the New York State
Office of Mental Health, The New York State Department of Health,
and The New York State Office of Mental Health, Case No. 1:13-cv-
04166-NGG-MDG (E.D. N.Y., July 23, 2013) is brought on behalf of a
class of individuals with serious mental illness who currently, or
who may in the future reside in, "impacted" adult homes.
Adult homes are large, for-profit, institutions in which residents
live in close quarters almost entirely with other individuals with
serious mental illness. By this action, the plaintiffs seek
relief for discrimination in violation of the Americans with
Disabilities Act and the Rehabilitation Act. The Plaintiffs
contend that they have few or no private spaces in the adult
homes, making it difficult to receive visitors or talk in private.
They add that they do not need to be consigned to adult homes.
Raymond O'Toole, 56 years old, has resided in Elm York, an adult
home in Queens, New York, since 2009. Ilona Spiegel, 59 years
old, has resided in Garden of Eden, an adult home in Brooklyn, New
York, since 2003. Steven Farrell, 39 years old, has resided in
Oceanview Manor, an adult home in Brooklyn, New York, since 2010.
The Plaintiffs have serious mental illness that substantially
limits one or more of their major life activities, including
working, concentrating, and sleeping.
Andrew M. Cuomo is the Governor of the state of New York, a public
entity covered by the Americans with Disabilities Act. He is
ultimately responsible for ensuring that New York operates its
service systems in conformity with the Americans with Disabilities
Act and the Rehabilitation Act. New York State Department of
Health is an agency of the state of New York that licenses,
supervises and enforces the laws and regulations applicable to
adult homes, and is responsible for protecting the rights of adult
home residents. Nirav R. Shah, the Commissioner of DOH, is
responsible for the operation and administration of DOH, including
its activities regarding adult homes.
Office Of Mental Health is an agency of the state of New York that
is charged by statute with "the responsibility for seeing that
mentally ill persons are provided with care and treatment, that
such care, treatment and rehabilitation is of high quality and
effectiveness, and that the personal and civil rights of persons
receiving care, treatment and rehabilitation are adequately
protected." Kristin M. Woodlock, the Acting Commissioner of OMH,
is responsible for the operation and administration of OMH,
including planning and providing programs and services for
individuals with mental illness in New York. DOH and OMH are
public entities covered by the Americans with Disabilities Act.
OMH shares with DOH the responsibility for protecting the rights
of the residents of impacted adult homes. DOH and OMH are
recipients of federal funds and are programs of state government.
The Plaintiffs are represented by:
Andrew Garry Gordon, Esq.
Julie Eden Fink, Esq.
Geoffrey Rogers Chepiga, Esq.
PAUL WEISS RIFKIND WHARTON GARRISON LLP
1285 Avenue of the Americas
New York, NY 10023
Telephone: (212) 373-3000
Facsimile: (212) 492-0543
E-mail: agordon@paulweiss.com
jfink@paulwiss.com
gchepiga@paulweiss.com
- and -
Cliff Zucker, Esq.
DISABILITY ADVOCATES, INC.
5 Clinton Square, 3rd Floor
Albany, NY 12207
Telephone: (518) 432-7861
Facsimile: (518) 427-6561
E-mail: cz@disabilityadvocates.info
- and -
Ira Abraham Burnim, Esq.
Jennifer Ellen Mathis, Esq.
BAZELON CENTER FOR MENTAL HEALTH LAW
1105 15th Street
Washington, DC 20005-8002
Telephone: (202) 467-4730
Facsimile: (202) 223-0409
E-mail: irab@bazelon.org
jenniferm@bazelon.org
- and -
Veronica Seungwon Jung, Esq.
Roberta L. Mueller, Esq.
NEW YORK LAWYERS FOR THE PUBLIC INTEREST, INC.
151 West 30th Street, 11th Floor
New York, NY 10001
Telephone: (212) 244-4664
Facsimile: (212) 244-4570
E-mail: vjung@nylpi.org
rmueller@nylpi.org
- and -
Jeanette M. Zelhof, Esq.
Kevin M Cremin, Esq.
Jota Lee Borgmann, Esq.
MFY LEGAL SERVICES, INC.
299 Broadway, 4th Floor
New York, NY 10007
Telephone: (212) 417-3727
Facsimile: (212) 417-3891
E-mail: jzelhof@mfy.org
kcremin@mfy.org
jborgmann@mfy.org
- and -
Mara Anne Kuns, Esq.
URBAN JUSTICE CENTER
123 William St.
New York, NY 10038
Telephone: (646) 602-5664
Facsimile: (212) 533-4598
E-mail: mkuns@urbanjustice.org
- and -
Timothy A. Clune, Esq.
DISABILITY ADVOCATES, INC.
5 Clinton Square Third Floor
Albany, NY 12207
Telephone: (518) 432-7861
Facsimile: (518) 427-6561
E-mail: tac@disabilityadvocates.info
NISSAN MOTOR: Recalls 3,509 Versa Note Model Cars
-------------------------------------------------
Starting date: July 25, 2013
Type of communication: Recall
Subcategory: Car
Notification type: Safety Mfr
System: Seats and Restraints
Units affected: 3,509
Source of recall: Transport Canada
Identification number: 2013255
TC ID number: 2013255
Manufacturer recall number: P365
Affected products:
Make Model Model year(s) affected
---- ----- ----------------------
Nissan Versa Note 2014
Certain vehicles fail to comply with the requirements of Canada
Motor Vehicle Safety Standard 207 Anchorage of Seats. Bolts
securing the rear seat back latch may have been manufactured
incorrectly. As a result, the seat anchorage could fail to meet
the strength requirements of the standard. This could increase
the risk of injury to rear seat occupants in a crash.
Dealers will replace the bolts.
NONG SHIM: Accused of Fixing Ramen Noodle Prices for a Decade
-------------------------------------------------------------
Writing for Courthouse News Service, Matt Reynolds reports that
four South Korean companies have fixed the price of instant ramen
noodles for more than a decade, a Koreatown market claims in a
federal antitrust class action.
The Plaza Company, which runs the Plaza Market in Koreatown,
claims the Seoul-based defendants and their U.S. subsidiaries
conspired six times between 2001-2008 to fix prices on dozens of
Korean instant noodle products, resulting in price increases of
roughly 54 percent.
Named as defendants are Nong Shim Co. and its Rancho Cucamonga-
based subsidiary, Nong Shim America; Ottogi Co. and its Gardena
subsidiary, Ottogi America; Samyang Foods Co. and Samyang USA of
Santa Fe Springs; and Korea Yakult and its U.S. affiliate, Paldo
America.
"This conspiracy was hidden from the public until July 12, 2012,
when the Korean Fair Trade Commission (KFTC) issued an order and
findings (the KFTC order) revealing that the defendants had
colluded to increase prices and keep such prices inflated. The
KFTC order revealed that collusion manifested itself in at least
two formal in-person meetings between the defendants (in 2001 and
2008), as well as hundreds of email communications between and
among the defendants," the 35-page lawsuit states.
The four noodle companies were ordered to pay a fine of 136
billion won, or $120 million, according to the Yonhap News, South
Korea's largest news agency.
Instant noodles are usually sold in plastic cups with seasoning
packets and dehydrated vegetables. Several varieties of noodles
are sold, including ramen, thick-wheat and flat noodles.
The noodle companies blamed the price increases on rising costs of
wheat flour, palm oil, vinyl wrapping, potato starch, and even the
weather, Plaza says in the lawsuit.
However, "As determined by the KFTC, the truth is that Korean
Noodle price increases substantially exceeded increased input
costs," the complaint states.
Plaza Co. claims the conspiracy extended to the U.S. market, and
charts year-by-year price increases from 2003 to 2008.
Nong Shim's U.S. sales in 2006 totaled $47.7 million. The
companies "sold hundreds of millions worth of noodles in the
United States," the lawsuit says.
Another South Korean company, Binggrae, also fixed prices but left
the noodle business in 2003, according to the complaint. Binggrae
is not a party to the lawsuit.
The Korean Fair Trade Commission fined Nong Shim 107.7 billion
won, and Samyang 11.6 billion won. Ottogi was ordered to pay a
9.7 billion won fine, while Korea Yakult was hit with a 6.3
billion won fine, according to the English-language edition of the
March 23, 2012 Yonhap News.
Plaza seeks damages and an injunction against the price-fixing
conspiracy.
Samyang USA and Paldo America declined to respond to requests for
comments. Nong Shim America and Ottogi America did not
immediately respond.
The Plaintiff is represented by:
Lionel Zevi Glancy, Esq.
Michael M. Goldberg, Esq.
GLANCY BINKOW & GOLDBERG LLP
1925 Century Park East, Suite 2100
Los Angeles, CA 90067
Telephone: (310) 201-9150
Facsimile: (310) 201-9160
E-mail: info@glancylaw.com
lglancy@glancylaw.com
mgoldberg@glancylaw.com
- and -
Lee Albert, Esq.
Gregory B. Linkh, Esq.
GLANCY BINKOW & GOLDBERG LLP
122 East 42nd Street, Suite 2920
New York, NY 10168
Telephone: (212) 682-5340
E-mail: lalbert@glancylaw.com
glinkh@glancylaw.com
- and -
Susan G. Kupfer, Esq.
Joseph Michael Barton, Esq.
GLANCY BINKOW & GOLDBERG LLP
One Embarcadero Center, Suite 760
San Francisco, CA 94111
Telephone: (415) 972-8160
E-mail: skupfer@glancylaw.com
jbarton@glancylaw.com
- and -
YoungKi Rhee, Esq.
WE THE PEOPLE LAW GROUP
15F The Salvation Army Building
476 Chungjeongro 3-Ka
Seodaemun-Ku, Seoul 120-837, Korea
Telephone: (822) 2285 - 0062
Facsimile: (822) 2285 - 0071
E-mail: ykrhee@wethepeople.co.kr
- and -
Christopher L. Lebsock, Esq.
HAUSFELD LLP
44 Montgomery Street, 34th Floor
San Francisco, CA 94104
Telephone: (415) 633-1908
Facsimile: (415) 693-0770
E-mail: clebsock@hausfeldllp.com
- and -
Megan Jones, Esq.
Mindy Pava, Esq.
HAUSFELD LLP
1700 K Street, N.W., Suite 650
Washington, D.C. 20006
Telephone: (202) 540-7200
E-mail: mjones@hausfeldllp.com
mpava@hausfeldllp.com
The case is The Plaza Company v. Nong Shim Company Ltd., et al.,
Case No. 2:13-cv-05274-PA-RZ, in the U.S. District Court for the
Central District of California (Western Division - Los Angeles).
NORTH AMERICAN TITLE: 3rd Cir. Remands "Tubbs" Suit to Dist. Ct.
----------------------------------------------------------------
The United States Court of Appeals for the Third Circuit remanded
for further proceedings the case captioned ARTHUR R. TUBBS; JANE
M. TUBBS, individually and on behalf of all others similarly
situated, Appellants, v. NORTH AMERICAN TITLE AGENCY, INC.; NORTH
AMERICAN TITLE GROUP, INC.; INDEPENDENCE ABSTRACT & TITLE AGENCY,
NO. 11-4510.
Arthur and Jane Tubbs appealed an order entered by the District
Court granting final judgment to North American Title Agency,
Inc., and denying leave to file a second amended complaint.
The Tubbs filed the putative class action in the District Court
against the Title Agency under RESPA. In addition, the Tubbs
brought claims under the New Jersey Consumer Fraud Act, N.J.S.A.
Section 56:8-2, and state law claims for breach of contract,
breach of a covenant of good faith and fair dealing, and unjust
enrichment. The District Court dismissed the Tubbs' complaint for
failure to state a claim under Fed. R. Civ. Pro. 12(b)(6).
The Third Circuit affirmed the grant of summary judgment to the
Title Agency on the claim under Section 8(b) of the Real Estate
Settlement Procedure Act, as well as the denial of leave to file a
second amended complaint. However, the Third Circuit reversed on
the remaining claims asserted against the Title Agency, and
remanded for further proceedings consistent with its opinion.
A copy of the Circuit Court's July 19, 2013 Opinion is available
at http://is.gd/4Qq0Z4from Leagle.com.
Robert J. LaRocca -- rlarocca@kohnswift.com -- (Argued), at Kohn,
Swift & Graf, One South Broad Street, Suite 2100, Philadelphia, PA
19107, Counsel for Appellants.
Kristofor T. Henning -- khenning@morganlewis.com -- (Argued), at
Morgan, Lewis & Bockius, 1701 Market Street, Philadelphia, PA
19103, Counsel for Appellees.
OIL PRODUCERS: Loses Appeal From Ruling in "Fawcett" Suit
---------------------------------------------------------
The Court of Appeals of Kansas affirmed a trial court ruling
granting partial summary judgment in favor of the plaintiff in L.
RUTH FAWCETT, Appellee, v. OIL PRODUCERS, INC. OF KANSAS,
Appellant, No. 108,666.
The interlocutory appeal under K.S.A. 60-2102(c) involves a class
action brought by a royalty owner in Seward County, Kansas, on
behalf of all royalty owners who were paid royalties from Oil
Producers, Inc. of Kansas (OPIK), which owned the working interest
or which operated Kansas wells from January 1, 1996, to the
present. The plaintiff, L. Ruth Fawcett Trust, with Les Spaulding
as the Trustee claimed that OPIK had underpaid royalties, and
sought recovery of the underpayments. Namely, plaintiff contended
that the stipulated price adjustments contained in the gas
purchase agreements between OPIK and certain gas purchasers were
actually deductions of expenses that OPIK was not allowed to
deduct from plaintiff's royalty share. Both parties moved for
summary judgment. OPIK argued that it had complied with the
express requirement of the leases to pay royalties based on actual
proceeds of sales of gas that it had sold at the well. Moreover,
OPIK maintained "that it would require a gross adulteration of the
gas sales contracts to interpret the price adjustments to be
improper 'expense' deductions."
The trial court granted partial summary judgment in favor of the
plaintiff. On appeal, OPIK contends that the trial court erred
when it held that OPIK impermissibly calculated the plaintiff's
royalty payments on the net proceeds OPIK received from certain
gas purchasers instead of calculating plaintiff's royalty payments
on the gross proceeds of the gas purchase contracts.
The Kansas Appeals Court disagrees, saying that under Kansas law,
the leases make it clear that the royalty is to be computed on the
gross proceeds of gas sales at the well. Because no special
provision in the leases allowed OPIK to compute royalties based on
the gross proceeds of gas sales at the well less the cost of the
stipulated price adjustments contained in the gas purchase
agreements, OPIK's arguments fail.
A copy of the Appeals Court's July 19, 2013 Decision is available
at http://is.gd/ZsCRY2from Leagle.com.
Robert W. Coykendall -- rcoykendall@morrislaing.com -- and Will B.
Wohlford -- wwohlford@morrislaing.com -- of Morris, Laing, Evans,
Brock & Kennedy, Chtd., of Wichita, and Julia Gilmore Gaughan --
jgaughan@morrislaing.com -- of the same firm, of Topeka, for
appellant.
Rex A. Sharp -- rsharp@midwest-law.com -- and Barbara C. Frankland
-- bfrankland@midwest-law.com -- of Gunderson, Sharp & Walke
L.L.P., of Prairie Village, and David E. Sharp --
dsharp@midwest-law.com -- of the same firm, of Houston, Texas, for
appellee.
David W. Nickel, of DePew Gillen Rathbun & McInteer, LC, of
Wichita, for amicus curiae Kansas Independent Oil and Gas
Association.
PROSHARES TRUST: 2nd Cir. Upholds Securities Litigation Dismissal
-----------------------------------------------------------------
The United States Court of Appeals for the Second Circuit affirmed
an order of the United States District Court for the Southern
District of New York entered on September 12, 2012, dismissing a
third amended complaint in In Re Proshares Trust Securities
Litigation, with prejudice, pursuant to Federal Rule of Civil
Procedure 12(b)(6.
In this putative class action, Plaintiffs collectively purchased
shares in 44 leveraged ProShares exchange-traded funds (ETFs)
during the August 6, 2006 through June 23, 2009 class period. They
seek to hold Defendants-Appellees ProShares Trust and ProShares
Trust II liable for material omissions and misrepresentations in
the prospectuses for those ETFs pursuant to sections 11 and 15 of
the Securities Act of 1933.
The case is MARK KARASICK, STEVEN S. NOVICK, SUSAN ASAI, STEPHEN
C. HERMAN, CHARLES SANKOWICH, MICHAEL A. HYMAN, HOWARD SCHWACK,
FRANCISCO JAVIER DE LION DIAZ, RENE LACROIX, ANTHONY KOURI,
ANTHONY ALEXANDER, JAY BILYEU, JUDY BILYEU, MICHAEL ERIC CODLIN,
WENDY ROCKWELL-GOFF, ROBERT SCHUMACHER, JAMES HERSHMAN, DOROTHY
HERSHMAN, SCOTT TESSLER, RICHARD RHOADS, MARTIN GARY NORRIS,
DOROTHY LOWELL, NANCY HITCHINS, THOMAS TRUONG, EDWARD CISNEROS,
CHRIS HONCIK, STEPHEN SHOAP, DMITRI ROUTSKI, ELENA LAVENDER-BOWEN,
DAVID BOWMAN, DAVID CHOW, MARK EVERETT BROWN, JONATHAN DEAN,
LAWRENCE LEWIS SINSEL, JR., KENNETH L. KRAMER, LAWRENCE I. WEINER,
JOHN E. KILLOUGH, ALAN PARKER, SCOTT A. SMELTZ, HOWARD SCHWACK,
DOUGLAS JONES, STEPHEN HERMAN, ON BEHALF OF THEMSELVES AND ALL
OTHERS SIMILARLY SITUATED, STEVEN SCHNALL, SHERRI SCHNALL, ON
BEHALF OF THEMSELVES, Plaintiffs-Appellants, v. PROSHARES TRUST,
PROSHARE ADVISORS LLC, SEI INVESTMENTS DISTRIBUTION CO., MICHAEL
L. SAPIR, LOUIS M. MAYBERG, RUSSELL S. REYNOLDS, III, MICHAEL
WACHS, SIMON D. COLLIER, PROSHARES TRUST II, EDWARD KARPOWICZ,
WILLIAM E. SEALE, CHARLES TODD, BARRY PERSHKOW, Defendants-
Appellees.
A copy of the Circuit Court's July 22, 2013 Decision is available
at http://is.gd/kBMfOyfrom Leagle.com.
CHRISTOPHER LOVELL -- clovell@lshllp.com -- at Lovell Stewart
Halebian Jacobson LLP, New York, NY (Jacob H. Zamansky --
Jacob@zamansky.com -- at Zamansky & Associates LLC, New York, NY,
on the brief), for Plaintiffs-Appellants.
ROBERT A. SKINNER -- Robert.Skinner@ropesgray.com -- at Ropes &
Gray LLP, Boston, MA (Nick W. Rose -- Nick.Rose@ropesgray.com --
at Ropes & Gray LLP, Boston, MA; Douglas H. Hallward-Driemeier --
Douglas.Hallward-Driemeier@ropesgray.com -- at Ropes & Gray LLP,
Washington, D.C., on the brief), for Defendants-Appellees
ProShares Trust, ProShares Trust II, ProShare Advisors LLC, SEI
Investments Distribution Co., Michael Sapir, Louis Mayberg, Edward
Karpowicz, William Seale, Simon Collier, Charles Todd, and Barry
Pershkow.
Arthur H. Aufses III -- aaufses@kramerlevin.com -- Steven S.
Sparling -- ssparling@kramerlevin.com -- at Kramer Levin Naftalis
& Frankel LLP, New York, NY, for Defendants-Appellees Russell
Reynolds and Michael Wachs.
S.A.C. CAPITAL: Indicted for Insider Trading Offenses in New York
-----------------------------------------------------------------
Courthouse News Service reports that federal prosecutors unsealed
on July 25, 2013, a five-count indictment accusing S.A.C. Capital
Advisors of criminal responsibility for insider trading offenses
committed by numerous employees."
The 41-page indictment charges S.A.C., one of the nation's largest
hedge funds, and its wholly owned affiliates with wire fraud and
four counts of securities fraud.
The indictment was unsealed five days after the SEC filed an
administrative action against S.A.C. founder and principal Steven
A. Cohen, charging him with failing to supervise employees who
profited enormously from insider trading.
Though the indictment stops short of charging Cohen with criminal
wrongdoing, it's the latest in a series of blows to his firm. In
March, the hedge fund paid a record $616 million to settle two
inside trading lawsuits filed by the Securities and Exchange
Commission.
Cohen also has been sued by his ex-wife, Patricia, who claims he
made a lot of money from inside trading and hid millions from her
during their divorce.
Cohen's S.A.C. managed more than $15 billion at its peak,
including about $8 billion of Cohen's own money, according to The
New York Times. Forbes magazine estimates Cohen's net worth at
$10 billion.
According to the grand-jury indictment, "institutional
indifference" at S.A.C. Capital Advisors, S.A.C. Capital Advisors,
CR Intrinsic Investors and Sigma Capital Management "resulted in
insider trading that was substantial, pervasive and on a scale
without known precedent in the hedge fund industry."
Prosecutors say the inside trading that occurred between 1999 and
2010 was "made possible by institutional practices that encouraged
the widespread solicitation and use of illegal inside
information."
"First, the S.A.C. entity defendants sought to hire S.A.C.
[portfolio managers] and S.A.C. [research analysts] with proven
access to public company contacts likely to possess inside
information," the indictment states. "Second, the S.A.C. entity
defendants' employees were financially incentivized to recommend
to the S.A.C. owner 'high conviction' trading ideas in which the
S.A.C. [portfolio managers] had an 'edge' over other investors,
but repeatedly were not questioned when making trading
recommendations that appeared to be based on inside information.
Third, on numerous occasions, the S.A.C. entity defendants failed
to employ effective compliance procedures or practices to prevent
S.A.C. [portfolio managers] and S.A.C. [research analysts] from
engaging in insider trading."
The indictment is one of two criminal indictments and two civil
complaints filed or unsealed Thursday, July 25, 2013, against
S.A.C., its affiliates and a former employee.
In the second indictment, former S.A.C. portfolio manager Richard
Lee is charged with securities fraud and conspiracy. He allegedly
received, and traded on, inside information about Yahoo, from
sources in that company. Based on inside tips about Yahoo
earnings that he obtained on April 20, 2009, he sold 1.2 million
shares of Yahoo from his portfolio the next day, the indictment
states.
Lee is also accused of buying 700,000 shares of 3Com, also acting
on inside information.
"At times the portfolio that Lee co-managed had a buying power of
approximately $1.25 billion," the indictment states.
He is one of five former S.A.C. employees who have admitted to
inside trading. Former portfolio managers Michael S. Steinberg
and Mathew Martoma, and former analyst Jon Horvath, among others,
also were charged with criminal wrongdoing.
In the first of two civil cases revealed July 30, 2013, a federal
class action was filed on behalf of everyone who traded in Elan
Corp. shares opposite to the S.A.C. defendants from July 1, 2006,
to July 29, 2008. These plaintiffs demand at least $549 million.
They claim the defendants ran the most profitable insider trading
conspiracy ever uncovered, particularly in trading of American
Depositary Receipts of Elan Corp. As a result of the conspiracy,
they claim, the defendants illegally profited by at least $549
million to the detriment of the class.
They say the SEC settlement, "while historic in size, provides for
disgorgement of only a fraction of the S.A.C. defendants' gains
from their two-year conspiracy."
Defendant doctor Sidney Gilman allegedly tipped off S.A.C.'s
Martoma about the results of a clinical trial for an Alzheimer's
drug being developed by Elan. Acting on that information, S.A.C.
"illegally traded in Elan ADRs and options between 2006 and 2008,"
the class claims.
"The widespread use of illegal inside information at S.A.C.
reflects Cohen's own approval of the practice," according to the
lawsuit.
"The absence of any compliance culture at SAC is perhaps best
illustrated by a single fact: that despite its policies and
putative compliance program, no SAC employee has ever been
discharged or suspended from the firm as a result of insider
trading," the lawsuit states.
The lawsuit lists 11 current and former S.A.C. employees who have
been accused of inside trading while employed by the firm.
Investors say the founder himself also engaged in inside trading
early in his career, based on allegations in his ex-wife's
lawsuit. Cohen allegedly made $10 million in the mid-1980s
trading on a tip that General Electric Co. was going to buy RCA
Corp.
Gilman began to cooperate with authorities in 2012 in exchange for
avoiding prosecution. He also agreed to disgorge more than
$234,000 in illicit profits.
Martoma, a relatively inexperienced portfolio manager whom one
fund officer later described as a "one trick pony with Elan," was
fired in 2010, according to the lawsuit. He faces both criminal
and civil charges.
The second civil lawsuit goes after S.A.C.'s assets, and the
assets of its affiliates.
Here are the defendants in that 39-page forfeiture complaint:
S.A.C. Capital Advisors LP; S.A.C. Capital Advisors LLC; CR
Intrinsic Investors LLC; Sigma Capital Management LLC; Any and all
assets of S.A.C. Capital Advisors LP, S.A.C. Capital Advisors LLC,
CR Intrinsic Investors LLC, Sigma Capital Management LLC; Any and
all assets of S.A.C. Offshore Capital Funding Ltd., S.A.C.
Spectrum Fund LLC, S.A.C. Global Macro Fund LLC, S.A.C. Arbitrage
Fund LLC, S.A.C. Multiquant Fund LP, S.A.C. Global Investments LP,
S.A.C. Private Equity Investors LP, S.A.C. Domestic Investments
LP, S.A.C. Domestic Capital Funding Ltd., Canvas Capital
Associates LLC, Sigma Capital Associates LLC, S.A.C. Capital
Associates LLC, S.A.C. Strategic Investments LLC, S.A.C. Meridian
Fund LLC, S.A.C. International Equities LLC, CR Intrinsic
Investments LLC, International Equities (S.A.C. Asia) Ltd., S.A.C.
Structured Investments LP, Sigma Fixed Income Fund Ltd., S.A.C.
Select Fund LLC, S.A.C. Energy Investments LP, S.A.C. Genesis Fund
LLC, S.A.C. Healthco Fund LLC, and S.A.C. Domestic Investments
(CA) LLC.
The Plaintiff is represented by:
Antonia Marie Apps, Esq.
U.S. Attorney's Office, SDNY
One St. Andrew's Plaza
New York, NY 10007
Telephone: (212) 637-2198
Facsimile: (212) 637-2527
E-mail: antonia.apps@usdoj.gov
- and -
Arlo Devlin-Brown, Esq.
U.S. Attorney's Office, SDNY
1 St Andrews Pl
New York, NY 10007
Telephone: (212) 637-2506
Facsimile: (212) 637-2527
E-mail: arlo.devlin-brown@usdoj.gov
The case is USA v. S.A.C. Capital Advisors, L.P. et al., Case No.
1:13-cr-00541-LTS, in the U.S. District Court for the Southern
District of New York.
SCBT FINANCIAL: S.C. Denies Motion to Dismiss Stockholders' Suit
----------------------------------------------------------------
Justice Melvin L. Schweitzer of the Supreme Court of New York
County denied a motion to dismiss RATIONAL STRATEGIES FUND v. HILL
pursuant to CPLR 3211(a)(8) for lack of personal jurisdiction or,
in the alternative, pursuant to CPLR 327(a) on the ground of forum
non conveniens.
Plaintiff, Rational Strategies Fund, is a resident of New York and
owns shares of common stock in defendant, SCBT Financial Corp. It
acquired the SCBT shares in 2012 when SCBT acquired Savannah
Bancorp, Inc., in which plaintiff held shares since 2009.
Plaintiff brought this action as a class action pursuant to CPLR
901 on behalf of itself and all other shareholders of SCBT,
excluding the individual defendants named in the action as well as
their affiliates. Although it is unclear how large the class is,
the plaintiff alleges there are hundreds, if not thousands, of
class members.
Justice Schweitzer held that relevant factors show the defendants
have not established that dismissing this action so it may be
brought in an alternative forum is within the interest of
substantial justice. Therefore, their motion is denied, he said.
The case is RATIONAL STRATEGIES FUND, ON BEHALF OF ITSELF AND ALL
OTHERS SIMILARLY SITUATED, Plaintiffs, v. ROBERT R. HILL JR., ET
AL., Defendants, 651625/2013.
A copy of the Supreme Court's July 18, 2013 Decision is available
at http://is.gd/q7zBPKfrom Leagle.com.
SEARS ROEBUCK: Order Denying Arbitration in "Bovay" Suit Upheld
---------------------------------------------------------------
The Appellate Court of Illinois, First District, Sixth Division,
affirmed an order of the circuit court of Cook County denying a
motion to compel arbitration and stay proceedings in ARIN A.
BOVAY, Individually and on Behalf of All Others Similarly
Situated, Plaintiffs-Appellees, v. SEARS, ROEBUCK AND COMPANY,
Defendant-Appellant, No. 1-12-0789.
In this interlocutory appeal brought pursuant to Illinois Supreme
Court Rule 307(a)(1) (eff. Feb. 26, 2010), defendant Sears,
Roebuck & Company sought the reversal of an order of the circuit
court of Cook County denying its motion to compel arbitration of
claims brought by plaintiffs in a consolidated class action. Sears
maintains the circuit court erred in ruling Sears waived its right
to arbitrate the claims and untimely demanded arbitration, arguing
a United States Supreme Court opinion issued in 2011 represented a
significant change in the law justifying its decision to seek
arbitration years after plaintiffs filed their respective
complaints.
The Illinois Appellate Court concluded that the circuit court did
not err in ruling Sears had a known right to demand arbitration
when plaintiffs' filed their complaints. Sears failed to establish
it would have been futile for it to assert its right to arbitrate
in these cases. Accordingly, the circuit court did not abuse its
discretion in finding Sears acted inconsistently with its known
right to arbitrate and prejudiced the plaintiffs by actively
litigating the case for years, says the ruling.
Justice Reyes delivered the judgment of the court, with opinion.
Presiding Justice Lampkin and Justice Gordon concurred in the
judgment and opinion.
A copy of the Appellate Court's July 19, 2013 Opinion is available
at http://is.gd/VmL1cffrom Leagle.com.
Greenberg Traurig LLP, Chicago, Illinois (Francis A. Citera, Jane
B. McCullough, Paul J. Ferak) for Appellant.
William J. Harte -- wharte@williamharteltd.com -- Chicago,
Illinois; Barnow & Associates, P.C., Chicago, Illinois (Ben Barnow
-- b.barnow@barnowlaw.com -- Sharon Harris, Erich P. Schork --
e.schork@barnowlaw.com); Lasky & Rifkind, Ltd., Chicago, Illinois
(Norman A. Rifkind -- rifkind@laskyrifkind.com -- Leigh Lasky --
lasky@laskyrifkind.com -- Amelia S. Newton --
newton@laskyrifkind.com); Robbins Geller Rudman & Dowd LLP, San
Diego, California (Bonny E. Sweeney -- bonnys@rgrdlaw.com --
Carmen A. Medici -- cmedici@rgrdlaw.com) for Appellees.
SECURITAS SECURITY: Fails to Pay OT and Minimum Wages, Suit Says
----------------------------------------------------------------
Courthouse News Service reports that Securitas Security Services
USA stiffs workers for overtime and minimum wages, a class action
claims in Superior Court.
The Plaintiff, Micah McLorin, of Pittsburg, California, is
representing himself in the lawsuit.
The case is Micah Mclorin vs. Securitas Security Services USA,
Case No. CGC-13-533031, in the Superior Court of California for
the County of San Francisco.
SERVICE CORPORATION: 9th Cir. Flips Order Denying of Arbitration
----------------------------------------------------------------
The United States Court of Appeals for the Ninth Circuit reversed
a district court judgment entered in JOSEPH BIERNACKI; RHEALYN
HOLLAND; MARISIA FARMER, Plaintiffs-Appellants, v. SERVICE
CORPORATION INTERNATIONAL; SCI FUNERAL AND CEMETERY PURCHASING
COOPERATIVE, INC.; SCI WESTERN MARKET SUPPORT CENTER, L.P., AKA
SCI WESTERN MARKET SUPPORT CENTER, INC.; JANE D. JONES; THOMAS
RYAN; GWEN PETTEWAY; CURTIS BRIGGS, Defendants-Appellees, No.
11-17495.
Plaintiffs, current and former employees of Service Corporation
International, appealed the district court's denial of their
motion to compel individual arbitration of their wage and hour
claims. The district court determined that by filing a putative
class action and seeking to compel arbitration after class
certification was denied, the plaintiffs had waived their rights
to compel individual arbitration.
The Ninth Circuit held that the defendants failed to establish
that they suffered prejudice from the plaintiffs' litigation.
"[W]e can find no evidence that the defendants suffered any
detriment beyond having to litigate issues related to class
certification, nor have the defendants pointed to any. Therefore,
because the defendants have not established that they suffered any
prejudice from the plaintiffs' decision to file a putative class
action and to compel individual arbitration after class
certification was denied, we must reverse the district court's
finding of waiver and its denial of the plaintiffs' motion to
compel individual arbitration," the Ninth Circuit concluded.
A copy of the Circuit Court's July 16, 2013 Memorandum is
available at http://is.gd/pHZs5Ffrom Leagle.com.
SHARP HEALTHCARE: Class Cert. Denial in Wage and Hour Suit Upheld
-----------------------------------------------------------------
Before the Court of Appeals of California, Fourth District,
Division One, for a second time is a proposed class action brought
by Juan Marcos Almaraz, Susan K. Bowers, Ruth Donley, Carolyn M.
Hitchin, Beth Hurley, Kurt Kalker, Lois K. Klepin and Maureen C.
Schickler, alleging violations of state wage and hour laws against
Sharp HealthCare, Grossmont Hospital Corporation, Sharp Chula
Vista Medical Center, Sharp Memorial Hospital and Sharp Coronado
Hospital and Healthcare Center on behalf of a proposed class
comprised of Sharp's registered nurses.
When this action was originally before the Calif. Appeals Court in
2010, the Court reversed the trial court's order denying class
certification and remanded with instructions that the trial court
reconsider the class certification motion to address additional
theories of liability asserted by Plaintiffs. On remand, the
trial court reconsidered and denied the motion for class
certification, and Plaintiffs now appeal from that order.
The Calif. Appeals Court, however, affirms the trial court's order
saying the trial court was within its discretion to deny the
motion for class certification.
The case is JUAN MARCOS ALMARAZ et al., Plaintiffs and Appellants,
v. SHARP HealthCare et al., Defendants and Respondents, NO.
D059648.
A copy of the Appeals Court's July 17, 2013 Decision is available
at http://is.gd/mrUuRtfrom Leagle.com.
Gilbert & Sackman, Robert A. Cantore -- rac@gslaw.org -- and Scott
G. Miller -- millersc@sullcrom.com -- for Plaintiffs and
Appellants.
Littler Mendelson, Theodore R. Scott -- tscott@littler.com -- and
Jody A. Landry -- jlandry@littler.com -- for Defendants and
Respondents.
THREE GENERATIONS: "Stecko" Suit to Proceed as Class Action
-----------------------------------------------------------
The Supreme Court of New York County granted plaintiffs' motion to
certify STECKO v. THREE GENERATIONS CONTR. INC. as a class action
and directed that notice of the action be published to the
putative class.
This action seeks to recover based on the alleged failure of Three
Generations Contracting Inc., Marie Fabrizio and Robert Fabrizio
to comply with Labor Law Section 220 and pay prevailing wages and
deducted supplemental benefits payments to the plaintiffs.
According to the Court, the action will be maintained and will
proceed as a class action against RLI INSURANCE COMPANY, to the
extent that RLI INSURANCE COMPANY issued a payment bond in
connection with construction contracts to THREE GENERATIONS
CONTRACTING INC.
The "Class" is defined as:
Plaintiffs, and all other individuals who furnished labor to
Three Generations Inc., and related affiliates and entities, on
all publicly financed construction projects undertaken by Three
Generations Contracting Inc., from January 1, 2008 through
December 31, 2011. These contracts and projects include but are
not limited to, City Hall, 60 Centre Street, 52 Chambers Street,
80 Centre Street, 2 Layfayette Street, 1 Centre Street, 100
Centre Street, 100 Gold Street, 111 Centre Street, 137 Centre
Street, 125 Worth Street, 253 Broadway, 51-53 Chambers Street,
346 Broadway (all in Manhattan); 198 161st Street (Bronx);
Borough Hall (Staten Island); 209 Joralemon Street (Municipal
Building) and 210 Joralemon Street (Borough Hall) (Brooklyn);
"General Construction Requirements Contract for Manhattan and
Bronx"; Various DCAS Buildings"; and "General Construction at 250
Broadway." The defined class shall not include any clerical,
administrative, professional or supervisory employees.
The law firm of Virginia & Ambinder, LLP is designated as counsel
to the Class.
The Notice of Pendency of Class Action Lawsuit is approved with
certain modifications.
The Court directed the Parties to appear for a Status Conference,
in IAS Part 13, room 210, at 71 Thomas Street, New York, New York
at 9:30 a.m. on September 25, 2013.
The case is CHRISTOPHER STECKO, JERZY RACZYNSKI and KRZYSTOF
JARGILO, individually and on behalf of all other persons similarly
situated who were employed by, THREE GENERATIONS CONTRACTING,
INC., and/or any other entities affiliated with or controlled by
THREE GENERATIONS INC., Plaintiffs, v. THREE GENERATIONS
CONTRACTING INC. and any related corporate entities, MARIE
FABRIZIO and ROBERT FABRIZIO, individually, CAROLINA CASUALTY
INSURANCE COMPANY, and RLI INSURANCE COMPANY, Defendants, 2013 NY
Slip Op 31524(U).
A copy of the Supreme Court's July 16, 2013 Order is available at
http://is.gd/KuvpAEfrom Leagle.com.
TRIUMPH: Recalls 237 Daytona and Street Triple Model Motorcycles
----------------------------------------------------------------
Starting date: July 29, 2013
Type of communication: Recall
Subcategory: Motorcycle
Notification type: Safety Mfr
System: Brakes
Units affected: 237
Source of recall: Transport Canada
Identification number: 2013257
TC ID number: 2013257
Affected products:
Make Model Model year(s) affected
---- ----- ----------------------
TRIUMPH 2012
TRIUMPH STREET TRIPLE R ABS 2012
TRIUMPH DAYTONA 675 ABS 2012, 2013
TRIUMPH DAYTONA 675R ABS 2012, 2013
On certain motorcycles, the Anti-Lock Brake System (ABS) modulator
may have been manufactured incorrectly and could fail. Loss of
ABS function would allow the front and/or rear wheel to lock under
braking which, in conjunction with traffic and road conditions,
and the rider's reactions, could increase the risk of a crash
causing property damage and/or personal injury.
Dealers will replace the ABS modulator.
UNITED TELEPHONE: Ohio High Court Decertifies Customers' Suit
-------------------------------------------------------------
Justice Kennedy of the Supreme Court of Ohio issued an opinion
addressing a single proposition of law by appellants, United
Telephone Company of Ohio and Sprint Corporation in the case
captioned Stammco, L.L.C., et al., Appellees, v. United Telephone
Company of Ohio et al., Appellants, No. 2012-0169, 2013-Ohio-3019.
UTO appealed from a judgment of the Sixth District Court of
Appeals holding that the trial court abused its discretion in
denying certification of plaintiffs' class-action lawsuit.
The Ohio Supreme Court accepted for review this proposition of
law: "A trial court does not abuse its discretion by evaluating
the merits of the plaintiffs' claims when denying class
certification."
Justice Kennedy held that a trial court must conduct a rigorous
analysis, which may include probing the merits of plaintiffs'
claims, to ensure that the prerequisites of Fed.R.Civ.Proc.
Rule 23 are satisfied.
"Even though the trial court's consideration of the merits here
was improper, its order denying certification of the class was
correct because plaintiffs' proposed amended class does not
satisfy the prerequisites of Civ.R. 23," he said. "Therefore, we
reverse the judgment of the court of appeals and reinstate the
order of the trial court that rejected plaintiffs' amended class
definition, which in effect decertifies plaintiffs' class-action
lawsuit."
Justice O'Neill concurs in the opinion.
A copy of the Supreme Court's July 16, 2013 Opinion is available
at http://is.gd/Z932gKfrom Leagle.com.
Murray & Murray Co., L.P.A., Dennis E. Murray Sr. --
dms@murrayandmurray.com -- and Donna J. Evans, for appellees.
Baker & Hostetler, L.L.P., Michael K. Ferrell --
mfarrell@bakerlaw.com -- John B. Lewis -- jlewis@bakerlaw.com --
and Karl Fanter -- kfanter@bakerlaw.com -- for appellants.
Linda S. Woggon, urging reversal for amicus curiae Ohio Chamber of
Commerce.
WHIRLPOOL CORP: 6th Cir. Affirms Liability Class Certification
--------------------------------------------------------------
Gina Glazer and Trina Allison filed a class action lawsuit on
behalf of Ohio consumers against Whirlpool Corporation alleging
that design defects in Whirlpool's Duet(R), Duet HT(R), Duet
Sport(R), and Duet Sport HT(R) front-loading washing machines
allow mold and mildew to grow in the machines, leading to ruined
laundry and malodorous homes. This suit and similar suits filed
against Whirlpool in other jurisdictions are consolidated in
multi-district litigation In re: WHIRLPOOL CORPORATION FRONT-
LOADING WASHER PRODUCTS LIABILITY ITIGATION managed by the
district court in the Northern District of Ohio.
The district court certified a liability class under Federal Rules
of Civil Procedure 23(a) and (b)(3) comprised of current Ohio
residents who purchased one of the specified Duets in Ohio
primarily for personal, family, or household purposes and not for
resale, and who bring legal claims for tortious breach of
warranty, negligent design, and negligent failure to warn. Proof
of damages is reserved for individual determination. In re
Whirlpool Corp. Front-Loading Washer Prods. Liab. Litig., No.
1:08-WP-65000, 2010 WL 2756947, at *4 (N.D. Ohio July 12, 2010).
The United States Court of Appeals for the Sixth Circuit
granted Whirlpool's request to pursue an interlocutory appeal of
the class certification decision, Fed. R. Civ. P. 23(f), and
affirmed the district court's opinion and order. The Sixth
Circuit denied Whirlpool's petition for rehearing by the panel and
for rehearing en banc. Whirlpool filed a petition for a writ of
certiorari.
The Supreme Court granted Whirlpool's petition, vacated the Sixth
Circuit's prior judgment, and remanded the case for further
consideration. The Supreme Court's order -- known as a grant,
vacate, and remand order (GVR) -- directed the Sixth Circuit to
reconsider the appeal in light of Comcast Corp. v. Behrend, 133
S.Ct. 1426 (2013).
After reconsideration, the Sixth Circuit affirms the order of the
district court certifying a liability class. The Sixth Circuit
upholds, under its prescribed narrow review, the district court's
determination that the Rule 23(a) and (b)(3) class certification
prerequisites were met. Plaintiffs established numerosity,
commonality, typicality, and adequate representation. In addition,
they showed that common questions predominate over individual ones
and that the class action is the superior method to adjudicate
Whirlpool's liability on the legal claims.
"Because the district court did not clearly abuse its discretion
in certifying a class on the issue of liability only, we AFFIRM,"
notes the Sixth Circuit Opinion.
The case is GINA GLAZER, Individually and on behalf of all others
similarly situated; TRINA ALLISON, Individually and on behalf of
all others similarly situated, Plaintiffs-Appellees, v. WHIRLPOOL
CORPORATION, Defendant-Appellant, NO. 10-4188.
A copy of the Circuit Court's July 18, 2013 Opinion is available
at http://is.gd/T3DO99from Leagle.com.
ARGUED: Malcolm E. Wheeler -- wheeler@wtotrial.com -- at WHEELER
TRIGG O'DONNELL LLP, Denver, Colorado, for Appellant.
Jonathan D. Selbin -- jselbin@lchb.com -- at LIEFF, CABRASER,
HEIMANN & BERNSTEIN, LLP, New York, New York, for Appellees.
ON BRIEF: Malcolm E. Wheeler, Michael T. Williams --
williams@wtotrial.com -- Galen D. Bellamy -- bellamy@wtotrial.com
-- Joel S. Neckers -- neckers@wtotrial.com -- at WHEELER TRIGG
O'DONNELL LLP, Denver, Colorado, F. Daniel Balmert --
fdbalmert@vorys.com -- Anthony J. O'Malley -- ajomalley@vorys.com
-- at VORYS, SATER, SEYMOUR AND PEASE LLP, Cleveland, Ohio, for
Appellant.
Jonathan D. Selbin, Jason L. Lichtman -- jlichtman@lchb.com -- at
LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP, New York, New York, for
Appellees.
John H. Beisner -- john.beisner@skadden.com -- at SKADDEN, ARPS,
SLATE, MEAGHER & FLOM LLP, Washington, D.C., for Amicus Curiae.
WHIRLPOOL CORP: Katten Muchin Discusses Sixth Circuit Ruling
------------------------------------------------------------
Bruce M. Sabados, Esq. -- bruce.sabados@kattenlaw.com -- and Dean
N. Razavi, Esq. -- dean.razavi@kattenlaw.com -- at Katten Muchin
Rosenman LLP, reports that the US Court of Appeals for the Sixth
Circuit has reaffirmed the certification of a class of purchasers
of Whirlpool appliances in light of the Supreme Court's recent
decision in Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013).
In 2010, a class of Ohio purchasers of the Whirlpool Duet washers
was certified as to liability in a products liability action
against Whirlpool, with proof of damages reserved for individual
determination, and in 2012 the Sixth Circuit affirmed. This year,
the Supreme Court vacated the decision with instructions to
reconsider in light of its March opinion in Comcast, which held
that certification was not proper where the proposed class failed
to demonstrate that damages could be decided on a class-wide
basis.
On remand, Whirlpool argued that, because consumer laundry habits
vary widely from household to household, the question of what
caused mold to grow in the Whirlpool washing machines would need
to be determined on an individual basis not suitable for class
action. The Sixth Circuit rejected the argument, citing Amgen
Inc. v. Connecticut Retirement Plans, 133 S. Ct. 1184 (2013). The
court noted that if the plaintiffs successfully proved a defective
design, all class members had experienced injury by virtue of
Whirlpool's failure to disclose it; if the plaintiffs failed, then
no action could be maintained. As a result, the class stood to
"prevail or fail in unison," and was appropriately certified.
Notably, the Sixth Circuit distinguished and limited Comcast on
the grounds that only a liability class, and not a damages class,
had been certified, suggesting that Comcast may not have broad
applicability in class actions where the questions of liability
and damages are tried separately.
Glazer v. Whirlpool Corporation, No. 10-4188 (6th Cir. July 18,
2013).
ZIPCAR INC: 1st Circuit Affirms Dismissal of "Reed" Case
--------------------------------------------------------
The United States Court of Appeals for the First Circuit affirmed
a district court's dismissal of a complaint filed by Naomi Reed
against Zipcar, Inc., claiming that certain fees charged by the
corporation are unlawful.
"What Reed has pleaded are a series of fees charged by competitors
that are lower than the fee charged by Zipcar, but this alone is
not enough, because Reed has failed to put forth sufficient facts
to support an inference that the cited charges reasonably
approximate the cost of breach," rules the First Circuit.
The case is NAOMI REED, Plaintiff, Appellant, v. ZIPCAR, INC.,
Defendant, Appellee, No. 12-2048.
A copy of the Appeals Court's July 17, 2013 Decision is available
at http://is.gd/Oja9U4from Leagle.com.
Frank John Jablonski -- frankj@progressivelaw.com -- with whom
Progressive Law Group, LLC, Eugene R. Richard --
generichard@wrhmlaw.com -- and Wayne, Richard & Hurwitz, LLP were
on brief, for appellant.
Matthew Rawlinson -- matt.rawlinson@lw.com -- with whom Michael E.
Bern -- michael.bern@lw.com -- Christopher J. Cunio --
ccunio@cmjlaw.com -- Patrick E. Gibbs -- patrick.gibbs@lw.com --
Nicholas D. Stellakis -- nstellakis@cmjlaw.com -- at Cooley Manion
Jones LLP, and Latham & Watkins LLP, were on brief, for appellee.
* Baby Activity Centers Among Recalled Products
-----------------------------------------------
The Associated Press reports that a line of baby activity centers
with an attachment that can hit and injure an infant are among
recently recalled consumer products. Others include cribs with
malfunctioning side-drop rails and portable electric generators
with potentially leaky fuel tanks.
Here's a more detailed look:
BABY JUMPERS
DETAILS: Baby Einstein musical motion activity jumpers with model
number 90564. The model number can be found on a tag attached to
the underside of the seat. The stationary activity centers have a
support seat covered in blue fabric attached to a large white
metal frame with brightly colored toys surrounding the seat. The
yellow sun toy is attached to the seat frame on a flexible stalk
with either three or five brightly colored rings. A date code is
located in the lower right corner of the label on the back of the
blue seat pad. The following date codes, indicating a manufacture
date prior to November 2011, are included in the recall: OD0, OE0,
OF0, OG0, OH0, OI0, OJ0, OK0, OL0, OA1, OB1, OC1, OD1, OE1, OF1,
OG1, OH1, OI1, OJ1 and OK1. They were sold from May 2010 through
May 2013.
WHY: The "sun" toy attachment on the activity jumper can rebound
with force and injure the infant.
INCIDENTS: 100 reports of incidents including 61 injuries.
Reported injuries include bruises, cuts to the face, a 7-month-old
boy with a lineal skull fracture, and a chipped tooth to an adult.
HOW MANY: About 400,000 in the U.S. and 8,500 in Canada.
FOR MORE: Call Kids II at 877-325-7056 or visit www.kidsii.com,
then click on the Recall link at the bottom of the page for more
information.
CRIBS
DETAILS: This recall involves Rockland Furniture round cribs made
by Nan Far Woodworking with model number 343-8314. The model
number is printed on a label located on the inner-lower portion of
the crib rail. They were sold at J.C. Penney stores and the
department store's website from January 2005 to December 2008.
WHY: The crib's drop-side rails can malfunction or detach. When
this happens, the drop-side rail can fall out of position and
create a space where an infant or toddler can get stuck, posing a
risk of strangulation or suffocation. A child can also fall out
of the crib. In addition, drop-side related incidents can also
occur due to incorrect assembly and with wear and tear.
INCIDENTS: None reported.
HOW MANY: About 3,900.
FOR MORE: Call Rockland Furniture at 877-967-5770 or visit
www.rocklandimmobilizationkit.com, then click on "Round Crib
Recall" for more information.
BOOTS
DETAILS: Autumn Run girls Gemma II Boots with SKU number 0529-
02613-1050. The SKU number can be found on a tag which is located
inside the shoe, on the inner side of the collar. They were sold
at Academy Sports + Outdoors stores nationwide and online at
Academy.com between July 2012 and October 2012.
WHY: An exposed staple in the sole of the boot presents a
laceration hazard to the consumer.
INCIDENTS: One report of a consumer who was punctured by an
exposed staple in the sole.
HOW MANY: About 5,000.
FOR MORE: Call Renaissance Imports at 877-632-2021 or visit
www.renimp.com and click on "Product Recall Info" for more
information.
PORTABLE GENERATORS
DETAILS: Subaru models SGX3500, SGX5000, and SGX7500 portable
generators. They have yellow fuel tanks and black frames with
collapsible handles. The word "Subaru" is on the fuel tank and is
on the control panel under the Subaru logo. They were sold at
authorized Subaru power equipment dealers nationwide, including
online, between September 2011 and January 2013. The produce and
serial numbers are on the end of the fuel tank above the wheels.
For more details: http://www.cpsc.gov/en/Recalls/2013/Subaru-
Portable-Gasoline-Generators-Recalled-by-Robin-America/
WHY: The fuel tank can leak, posing a fire or burn hazard.
INCIDENTS: Four reports of fuel leakage. No injuries or property
damage have been reported.
HOW MANY: About 4,100 units in the U.S. and 490 units in Canada
FOR MORE: Call Robin America at 866-664-1363 or visit
www.subarupower.com and click on Recall at the bottom of the page
for more information.
REFRIGERATORS
DETAILS: Viking built-in refrigerators with bottom freezers. They
were sold from November 2005 through October 2012. The model and
serial numbers are located on the ceiling of the interior of the
refrigerators. The first six numbers in the serial number are the
date the unit was manufactured. The Designer Series includes
model numbers starting with DDBB363, DDBB536, DTBB363, DFBB363,
DFBB536, and FDBB5361 with serial numbers starting with 110105 -
081012. The Professional Series includes model numbers starting
with VCBB363, VCBB536, VCBB5361, VIBB363, and VIBB536 with serial
numbers starting with 110105-080512.
WHY: The refrigerator's doors can come off, posing an injury
hazard to consumers.
INCIDENTS: 39 reports of falling refrigerator doors, including 12
reports of injuries involving a fracture, bruises, strains and
cuts, and 25 reports of minor property damage. The 39 new reports
are in addition to 57 reports in the previous recall, from 2009,
which included four reports of injuries involving bruises, broken
toes or fingers, and strains.
HOW MANY: About 31,000.
FOR MORE: Call Viking at 877-546-0136 or visit www.vikingrange.com
and click on Safety Recall Information.
FAN HEATERS
DETAILS: Soleil portable fan heaters with model number LH-707.
The model number is printed on the underside of the fan on a
sticker. They were sold at Home Depot stores from September 2012
through May 2013.
WHY: The portable fan's plastic housing can melt, deform and catch
fire during use.
INCIDENTS: 464 reports of the fans melting. No injuries or
property damage have been reported.
HOW MANY: About 107,000.
FOR MORE: Call Home Depot at 877-527-0313 or visit
www.homedepot.com and click on Product Recalls for more
information.
EXCERSICE EQUIPMENT
DETAILS: Johnny G. Krankcycle by Matrix with detachable seats that
can be removed from the frame by lifting up on the seat. The
Krankcycles have handles that the user turns in a circular motion
for exercise. They were sold from January 2008 through January
2012.
WHY: The seat can unexpectedly detach from the Krankcycle's frame
during use, posing a fall hazard to users.
INCIDENTS: Two injuries from falls when the seat detached have
been reported, including one report of broken ribs and one report
of a back injury requiring surgery.
HOW MANY: About 2,200.
FOR MORE: Call Johnson Health Tech North America at 866-218-3674.
* Class Actions Target Tourism & Hospitality Industry in Canada
---------------------------------------------------------------
Vawn Himmelsbach, writing for Canadian Lawyer Magazine, reports
that the travel and hospitality industry is going through immense
changes -- instead of booking a trip at a travel agency, many
consumers and businesses are searching deal sites, making
comparisons, and booking their own travel online.
While some may argue this has led to a more competitive
environment for consumers and businesses, others are challenging
certain arrangements between online booking agencies and hotel
chains, alleging price fixing and other competition breaches.
In 2012, two major travel-related class actions were filed in the
U.S. The first, Turik v. Expedia Inc. (including Marriott
International Inc., Starwood Hotels & Resorts Worldwide Inc., and
Hilton Worldwide Inc., among others), was filed in the Northern
District of California. That was quickly followed by a class
action filed by James Smith against the same group of defendants
in the Northern District of Texas.
In April, a US$55 million settlement was reached in the unfair
business practices pending class action in Texas. Expedia is
appealing the charges, claiming faulty evidence and an incorrect
interpretation of the law.
The tourism and hospitality industry is increasingly being
targeted in the U.S. and there are some signs that trend is
creeping up into Canada, says Christopher Naudie --
cnaudie@osler.com -- who practices corporate and commercial
litigation with Osler, with a strong focus on class action defense
and cross-border litigation. High-profile class actions in the
U.S. tend to open the door for copycat class actions in Canada.
So why are plaintiffs casting an eye on this industry? Travel and
hospitality is a high-profile industry, but it's also going
through major changes, thanks to the explosion of options for
online bookings. So class action plaintiffs may want to roll the
dice.
Here in Canada, Juroviesky and Ricci LLP filed a class action in
July 2009 against Expedia Canada Corp. and Expedia.ca in the
Ontario Superior Court of Justice. The suit alleges widespread
violations of consumer protection legislation, including an
allegation that consumers were sold lodging accommodations and
charged a non-itemized taxes and services fee charge in violation
of the Consumer Protection Act and the Competition Act.
"It is ironic because most people say this industry is one of the
most competitive in the world, particularly because of options for
booking through the Internet," says Mr. Naudie. "From the
perspective of the consumer, relative to the world that existed 10
years ago, one would be hard pressed to say there's not vigorous
price competition in this industry."
Despite this, we're seeing challenges in the courts to certain
vertical arrangements between online booking agencies and hotel
chains.
While we're seeing class action litigation related to consumer
protection legislation, there are others, such as a pending class
action in Vancouver against hotel chains relating to the
disclosure of fees on hotel invoices and whether there's been
applicable consumer disclosure and consent to those fees.
There has also been pending class action litigation in Canada
against the airlines (which has been going on for years), which
relates to surcharges on certain travel arrangements.
Then there's an allegation against Aeroplan related to unilateral
changes to loyalty plans, and whether or not those changes can be
made in light of consumer protection statutes.
"In light of the Aeroplan case, one may question whether hotels
may be a target as well," says Mr. Naudie, adding that most hotel
chains offer a loyalty program to their customers. "Whenever
you're changing a contract or changing a fee, get advice from
counsel to make sure the appropriate disclosure is made."
Typically plaintiff lawyers see something in the media that they
find interesting, such as a regulatory finding or price fixing
allegation. Then they look at whether it's something that could be
pursued in Canada. If it is, they look for plaintiffs, says
Jill Yates -- jyates@mccarthy.ca -- a partner in the litigation
group with McCarthy T‚trault LLP.
In some cases, Canadian plaintiff lawyers might form a coalition
with U.S. plaintiff lawyers, who would potentially receive some
sort of remuneration in exchange for strategic advice. Or, there
might be an industry, lobby, or consumer group that operates both
north and south of the border.
"Does that mean a case like the Marriott case from the U.S. could
happen here? Absolutely it could," says Ms. Yates. "That's where
most Canadian class actions come from -- (we) see it happening in
another jurisdiction."
There are differences in the law, however. Antitrust law in the
U.S. is different from Canada, so there have to be some
adjustments.
Also, in the U.S., all class actions are grouped together and the
courts decide which will go ahead in which jurisdiction. That
means there's a single proceeding for all class actions.
We don't have that in Canada, says Yates. Class actions are
determined in the superior courts of each province, not in federal
court, so there are complicated legal issues associated with
trying to bundle together a case into one province. This
occasionally does happen, though it's usually informal and by
consent.
One of the challenges with the tourism and hospitality industry is
the online booking model, where travel and hotel bookings occur
across borders. Any travel-related business must be mindful of
local legislation that may apply to distribution arrangements.
"Just because your distribution, pricing, or online model may be
compliant in the U.S. doesn't mean it will be compliant in
Canada," says Mr. Naudie.
While there's latitude in the industry to explore creative pricing
agreements, it's always wise to get advice from external counsel,
he said. The same goes for making changes to contracts with
consumers.
"There's no way to immunize yourself in any industry from any
class action," says Mr. Naudie. "However, you can take prudent
steps to make sure your procedures are compliant, which will
diminish the potential risk."
If you're hit with a class action, it's important to get
representation quickly and coordinate your defense, he says,
because the certification process can move quickly.
In terms of avoiding a class action altogether, there isn't a lot
that can be done, says Ms. Yates. Consumer protection legislation
makes Canadian companies vulnerable to this, "so you're better to
try to protect yourself on the merits than the class action."
"The legislation is deliberately encouraging of class actions in
the interest of access to justice," says Ms. Yates. That means
the chips are stacked against defendants, she added. It's not
about having a dead-winner case; the plaintiff just has to plead
reasonable cause, enough that a judge will let the case continue.
"You should assume you're going to be a target and get advice
about the merits," says Ms. Yates. "If you are vulnerable on
merits, then you're vulnerable." Be prepared, such as having
appropriate document preservation measures.
The fact that a class action has been filed doesn't mean there's
any merit to the underlying allegations, but there are
reputational consequences and this can lead to customer and
supplier inquiries. So it's also important to ensure you have the
right messaging, says Mr. Naudie, to underscore your confidence in
your business model.
But this puts the defendant in a tough position -- if they're not
doing anything wrong. While your company may not want to engage
with the plaintiff lawyers, says Yates, you also don't want those
lawyers to have a mouthpiece to talk about your client in the
media. That means some sort of response is usually necessary.
In-house counsel in the travel and hospitality industry should
recognize they are vulnerable, says Ms. Yates, and that increases
the chances they're going to be targeted by a class action. They
should understand their exposure under Canadian law, make sure
their house is in order, and have a team ready to be deployed if
needed.
"Take any preventative measures -- not class action preventative
measures, but subject matter prevention measures. Talk to
competition lawyers, make sure the way you're doing it is okay,"
says Ms. Yates.
Often this isn't part of the daily business of in-house counsel,
so it's important to periodically look around and see if the
landscape has changed, she says. You may never face a class
action, but it's worth the investment to have a conversation about
it -- particularly if you're exploring new pricing practices.
The travel and hospitality industry in particular is ripe for
legal action, considering what's going on in the U.S.
For any industry in Canada -- especially one where you're dealing
with consumers, and where price is an issue -- it's always
important to watch the trends, particularly if there's parallel
litigation going on in the U.S., says Mr. Naudie. "Be mindful
that the risk is out there."
Expedia class action to move forward in Canada
While Expedia has been making headlines south of the border, the
class action filed in July 2009 against its Canadian counterpart
(Expedia Canada Corp. and Expedia.ca) is moving ahead after being
certified earlier this year on Feb. 1.
The class action, filed by Juroviesky and Ricci LLP in the Ontario
Superior Court of Justice, is based on alleged violations of the
Consumer Protection Act and Competition Act.
The plaintiff alleges that Expedia, which serves as a broker or
middleman for hotels, didn't remit the full sales tax to the
hotels, but instead remitted the sales tax on the wholesale rate
-- and then pocketed the difference.
"This is a rare class action because the vast majority settle
after certification," says Henry Juroviesky -- hj@juroviesky.com
-- managing partner at Juroviesky and Ricci. "Here they are
moving it forward past certification. We're really in a territory
that's quite new."
The class action is asking for $50 million, "but we just want a
refund of any fees that were unlawfully charged and better
disclosure on the web site," says Mr. Juroviesky.
Each online travel company has a different set of terms and
conditions in its contract. If they bury something in the
contract that says they can do what they're doing, it's hard to
sue them. In this case, the allegation is that Expedia is
prohibited by contract from having a services fee -- but other
online travel companies may have a contract that permits it.
There were two recent wins against Expedia in the U.S., in Texas
and Hawaii, "so that's a step in the right direction," says
Mr. Juroviesky.
That being said, the laws are different in Canada and the U.S.
"I wouldn't say U.S. law will have no effect (on what happens in
Canada)," says Mr. Juroviesky. "What a U.S. judge has to say is
closely analyzed and listened to in Canada."
But whether it has any practical ramifications in Canada is yet to
be decided in the courts.
* FDA Proposes New Steps to Ensure Safety of Imported Foods
-----------------------------------------------------------
Mary Clare Jalonick, writing for The Associated Press, reports
that the Food and Drug Administration proposed new steps on
July 26 to ensure that fresh produce, cheeses and other foods
imported into the United States are safe.
The proposed rules, required by a sweeping food safety law passed
by Congress 2 1/2 years ago, are meant to establish better checks
on what long has been a scattershot effort to guard against unsafe
food imported from more than 150 countries. Only around 2 percent
of that food is inspected by the government at ports and borders.
About 15 percent of the food Americans eat is imported, including
about 50 percent of fruits and 20 percent of vegetables. An
estimated 3,000 people die from food-related illnesses every year.
The proposed guidelines would require U.S. food importers to
verify that the foreign companies they are importing from are
achieving the same levels of food safety required in this country.
The rules, which would also improve audits of food facilities
abroad, could cost the food industry up to $472 million annually.
Since Congress passed the food safety law in December 2010 and
President Barack Obama signed it in early 2011, there have been
several outbreaks caused by imported foods, including an
occurrence of listeria in imported Italian cheese last year that
killed four people. Other illnesses were linked to tainted
papayas, mangoes and nuts and spices used as ingredients.
Michael Taylor, FDA deputy commissioner for foods, says the rules
show a major shift in thinking in the way the government works to
keep food safe.
Like rules for domestic farmers and food companies released
earlier this year, the idea is to make businesses more responsible
for the food they are selling or importing by proving that they
are using good food safety practices. They might do that by
documenting basic information about their suppliers' cleanliness,
testing foods or acquiring food safety audits.
Currently, the government does little to ensure that companies are
trying to prevent food safety problems but generally waits and
responds to outbreaks after they happen.
"The onus is on us to detect the problem that has already
occurred," Mr. Taylor said.
Requiring better prevention was the intent when Congress passed
the bill. But since then, the law has run into several obstacles,
including FDA delays in issuing the rules, a lack of congressional
funding and increasing opposition from some rural members of
Congress who represent worried farmers.
A farm bill passed in the House this month included an amendment
sponsored by Rep. Dan Benishek, R-Mich., that would delay all of
the food safety rules. Farmers and importers have expressed
concern that the rules will require too much time, cost and
paperwork.
FDA regulators say the new rules are necessary as the food system
becomes more complex and more global. Food often stops in several
locations and passes through many different hands in a matter of
days before it hits grocery shelves.
And a lack of funding has given the FDA little oversight over what
is being produced. The agency inspects most food companies in the
United States only every five to 10 years, and it does even fewer
inspections abroad. The food safety law requires the agency to
step up those inspections, and Taylor said the FDA inspected as
many as 1,300 facilities in foreign countries last year, up from
300 in 2010. That is still a just a fraction of the companies
that import to the United States.
Many food companies and importers already follow the steps that
the FDA is proposing. But officials say the new requirements for
domestic and imported foods could have saved lives and prevented
illnesses in several of the large-scale outbreaks that have hit
the country in recent years.
The domestic food safety rules proposed in January would require
U.S. farms and food processors to take new precautions against
contamination such as making sure workers' hands are washed,
irrigation water is clean and livestock stay out of fields. Food
manufacturers will have to submit food safety plans to the
government to show they are keeping their operations clean.
The FDA will take comments on both the domestic and foreign food
safety proposals for the next several months and then move to
issue final rules.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
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